New research from Hamptons International pinpoints increase of cash buyers as a key market recovery driver
- 35 per cent of property sales in the first half of 2013 in the UK were paid for in cash
- The South West has the highest proportion of cash buyers in England and Wales
- The number of cash buyers in the UK has grown faster than mortgage buyers in 2013
Cash buyers are driving a large part of the recent property market recovery, much more than buyers with a mortgage, according to new research from Hamptons International, a leading residential property services company.
In the first half of this year, more than a third (35%) of house sales in England and Wales were made by cash buyers. This represents an increase of 11 per cent compared with the same period in 2012* and the number of people buying with cash today is at its highest point since 2008.
At a time when mortgage availability is improving and confidence in the property market is returning, Hamptons International’s research suggests that the number of cash buyers in 2013 has grown at a much faster rate than mortgages. Of the additional 20,000 property sales in the first half of 2013 compared with the same time last year, Hamptons International estimates that 70 per cent can be attributed to cash buyers with a 13,600 (11%) increase in cash sales and just 6,300 (3%) increase in mortgaged sales.
Johnny Morris, Head of Research at Hamptons International, comments: “Contrary to popular belief, much of the recovery in house sales in recent months has been driven by increased cash buyer activity rather than simply increases to mortgage lending. While there is no doubt that increased mortgage activity helps to improve sentiment and increase liquidity in the market, the growth of cash buyers in the market has overtaken that of mortgage buyers.”
Perhaps surprisingly, the South West has the highest proportion of cash buyers (39% in the last 12 months) compared with an average of 33 per cent across England and Wales. By contrast, London on average has the smallest proportion at just 24 per cent, although this figure rises to 60 per cent in Prime Central London. The average price of a house in the South West is £173,000, in London is £386,000 and in Prime Central London is £935,000.
Morris continues:“Many cash buyers are downsizers planning to take advantage of the capital locked away in their properties. The South West has both the highest rate of owner occupation in England and the highest proportion of older age groups in its population. London on the other hand, has the highest property values in the country and while cash transactions in Prime Central London are more commonplace than anywhere else in the country, less than seven per cent of London sales over the last 12 months happened in this market.”
*Data has been taken from the first half of 2012 and compared with the first half of 2013
For media enquiries please contact:
Aisling Gray, Senior PR Manager, Hamptons International
020 7758 8422 / 07786 118634 / firstname.lastname@example.org