This article is an external press release originally published on the Landlord News website, which has now been migrated to the Just Landlords blog.
New figures released today have indicated that property cash buyers in the UK are currently at a record high.
According to data from the UK’s second largest mortgage lender the Nationwide, 38% of homes sold in Britain during the first quarter of 2015 were done so without the need for a mortgage.[1]
Investment
The results of the report show that low interest rates are encouraging more investment in property, with tumbling mortgage lending rates also a major contributing factor.
Additional statistics from the Nationwide report shows that British house prices in May were up by 4.6% in comparison to the same period last year. This represented a slowdown from the 5.2% annual rise reported in April. The overall price of a property in May was up 0.3% on last month, meaning that the average price of a home in Britain is now £195,166.[1]
Last year, the proportion of cash buyers purchasing a property was 36%, meaning the 38% recorded in the first months of this year is a record level.[1]
New rules
Despite the record high recorded, the Bank of England suspects that the peak is unlikely to continue, due to an increase in mortgage lending. On Tuesday, data revealed that the total of mortgage approvals for home purchases increased to a 14-month high during April.
Alex Gosling, chief executive of online agents HouseSimple.com, feels that the, ‘proportion will fall throughout the year as lenders and borrowers adjust to, and become more familiar with the new lending rules.’ He went on to say that this, ‘realignment of buyers with lenders may well be evident in the strong mortgage approvals data issued this week by the Bank of England.’[1]
Cash buyers at record high
Totals
Taking into account the total number of cash buyers as opposed to the proportion, there has been a slight rise since 2008. However, figures have not yet reached the heights of the housing surge in 2007.
The highest proportion of cash purchasers was recorded in the North East in 2013, were almost 50% of transactions were of this type. Second highest was the South West of England. This was due to the fact that the cost of property in the North East was quite low in comparison to the rest of England.
[1] http://www.bbc.co.uk/news/business-32977217
