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TODAY'S OTHER NEWS

Cash no longer King? Proportion of cash buyers hits all-time low

A report from Countrywide says the proportion of homes in Great Britain bought with cash fell to a mere 28 per cent in the first six months of this year - the lowest level since records began in 2007. 

The data, from Countrywide’s upmarket Hamptons International brand, says the this 28 per cent figure is significantly lower than the peak of 36 per cent recorded in 2009, while the credit crunch was gaining momentum.

Every region in Great Britain recorded a fall in cash sales over the last two years.  

The West Midlands recorded the biggest decrease in the proportion of homes bought with cash since the first half of 2017  down 9.0 per cent in that period. 

This was followed by London (down 7.0 per cent).  

Scotland recorded the smallest fall, with the proportion of homes bought mortgage free decreasing just 1.0 per cent over the past two years.

The South West - a key area for retirees and downsizers to purchase - remains the region with the highest proportion of cash sales; 34 per cent of homes were purchased with cash in the first half of this year. 

Meanwhile London had the lowest proportion of cash sales – just 19 per cent.

According to the latest Land Registry data the average home bought with cash in the January-to-June 2019 period cost £217,810; in London this figure is £489,820.

Hamptons says that 10 years ago investors accounted for 32 per cent of cash buyers, but during the first half of 2019 only 24 per cent of cash purchases were bought as a buy-to-let.  

Those buyers who did purchase in cash bought smaller homes too.  

Some 18 per cent of cash buyers purchased a four-bedroom home two years ago but this fell to 16 per cent this year; two bedroom cash purchases rose slightly in the same period. 

“The fall in cash purchases not only reflects tighter affordability, but also a decrease in activity amongst downsizers, the group of people most likely to have built up enough equity to purchase property with cash. It also reflects a drop off in the number of homes bought by investors, many of whom used cash to purchase” according to  Aneisha Beveridge, head of research at Hamptons International.

Table 1 – Proportion of homes bought with cash by region

% of cash buyers

(H1 2019)

Change in proportion of cash purchases since H1 2017

Average cash purchase price (H1 2019)

South West

34%

-6%

£250,830

Wales

32%

-6%

£156,240

North East

31%

-5%

£116,610

Scotland

30%

-1%

£138,090

North West

29%

-5%

£149,890

Yorkshire & the Humber

29%

-6%

£155,310

East Midlands

27%

-6%

£185,200

South East

27%

-6%

£306,380

East of England

26%

-6%

£274,860

West Midlands

23%

-9%

£172,050

London

19%

-7%

£489,820

Great Britain

28%

-5%

£217,810

Table 2 – Top 10 cash buyer hotspots by local authority

Local Authority

Region

% of homes bought with cash (H1 2019)

Change in proportion of cash purchases since H1 2017

Average cash price

West Somerset

South West

58%

-7%

£231,890

Ceredigion

Wales

57%

4%

£191,430

Torridge

South West

53%

0%

£241,160

West Dorset

South West

53%

-8%

£289,290

Kensington & Chelsea

London

53%

-3%

£1,261,080

North Norfolk

East

53%

-7%

£260,240

Conwy

Wales

52%

2%

£164,440

East Lindsey

East Midlands

52%

-8%

£178,090

Isle of Wight

South East

52%

-4%

£223,950

Argyll and Bute

Scotland

51%

-1%

£140,970

Map – Proportion of homes bought with cash by local authority (H1 2019)

Cash no longer King? Proportion of cash buyers hits all-time lowCash no longer King? Proportion of cash buyers hits all-time low

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