Buy To Let
Cash buyers help housing market recovery
A third of homebuyers made their purchase without a mortgage in the first half of the year.
According to estate agent Hamptons International, 140,000 out of 400,000 property purchases made between January and June 2013 were mortgage-free. This represents an 11% rise on the same period in 2012.
A Hamptons spokesperson said:
“Contrary to popular belief, much of the recovery in house sales in recent months has been driven by higher cash buyer activity rather than simply increases to mortgage lending.”
The number of cash buyers in the market is at a five-year peak, and is growing at a faster rate than the increase in mortgage borrowers. There were 13,600 more cash sales in Q1 2013 than Q1 2012, compared to an increase of 3,600 in mortgage-backed sales over the same period.
Cash purchases were the most prevalent in the South West (39%), which Hamptons attributes to the prevalence of older people in the region downsizing to smaller properties.
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The fewest cash transactions were carried out in London (24%), which Hamptons attributes to the high cost of housing in the capital.