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Proportion of Homes Bought With Cash Reaches Lowest Level on Record

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.

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