Number of cash buyers hits ten-year low as more investors exit market
Research by Hamptons International also points to Stamp Duty changes reducing number of older downsizers, who are also often cash buyers.
The number of cash buyers and investors in the property market has hit a 10-year low, it has been revealed.
Hamptons International has crunched data from the Land Registry and its parent company Countrywide and says that ten years ago 144,350 or 37.8% of all homes were bought with cash, the last time unmortgaged buying peaked within the housing market.
This year 113,490 transactions or 29.3% of all sales were cash purchases during the first half of the year.
Also, the number of investors in the market has dipped compared to 2007/8 from 32% of the market to 24%, and Hamptons says both this and fewer cash sales reflects lower buy-to-let and developer activity.
“Increased taxation for landlords and the prospect of weaker future gains has meant that investors accounted for just one in four cash buyers in H1 2018, down from one in three in H1 2007,” says Aneisha Beveridge, Head of Research at Hamptons International.
London has seen the steepest decline. Just 21% of homes were bought in the capital for cash during the first half of this year, the lowest figure since either the Land Registry or Countrywide began gathering data on this type of sale.
“Housing affordability has a role to play in the decline, as does the drop off in investor activity,” says Aneisha.
“Cash buyers have historically tended to be older generations downsizing by cashing in on equity gained from past house price growth. But recent slower price growth and higher stamp duty bills on new purchases have contributed to fewer downsizers, and as a result, fewer cash buyers.”
Read more about cash buyers.
