Downward trend in the proportion of homes bought with cash according to Hamptons International

New research published  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 in H1 2007, cash purchases peaked in H2 2008, when 37.8% of homes were bought without a mortgage.

Hamptons International reveals that 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.

Commenting Aneisha Beveridge, Head of Research, Hamptons International, said:

“The proportion of homes purchased with cash has fallen to the lowest level on record.  Today less than a third of homes are bought with cash.  Housing affordability has a role to play in the decline, as does the drop off in investor activity.

“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.

“But not all cash buyers are older generations looking to downsize.  Shifting investor sentiment has also contributed to the fall in cash buyers.  Increased taxation for landlords and the prospect of weaker future gains has meant that investors accounted for just one in four cash buyers (24%) in H1 2018, down from one in three (32%) in H1 2007.”

Read the Hamptons International research report in full click here.