New research by Hamptons International shows that in H1 2018, the proportion of homes in England and Wales bought with cash fell to 29.6%, the lowest level since the company’s records began.
Hamptons International’s records started in H1 2007 when 33.6% of homes were purchased with cash and peaked in H2 2008 when 37.8% of homes in England and Wales were bought without a mortgage.
In H1 2018, 113,490 homes were cash purchases, totaling £25.3bn in value according to Land Registry - the lowest level in five years. This was also 21% less than the number of purchases in H1 2017 (144,350) which totaled £31.2bn in value.
The downward trend in the proportion of homes bought with cash reflects a drop off in investor and developer purchases. Hamptons International Research using Countrywide data, shows that in H1 2018 investors accounted for one in four (24%) of cash purchases, down from one in three (32%) in H1 2007 and peaked at 43% in H1 2008. The same goes for developers who purchased just 2% of the homes bought with cash in H1 2018, down from 6% in H1 2007.
Conversely, the proportion of cash buyers purchasing homes to live in has increased, most likely due to pensioners downsizing. In H1 2018, 69% of homes bought with cash were purchased to live in, 14% more than in H1 2007. The average investor purchasing with cash spends 31% less on a property than a cash buyer purchasing a home to live in, £162,860 compared to £235,480.