child mortarboard gbp briefcase bath coffeecup tree twitter search crosshair fax house papers sort house-pound brochure list-items notes printer video-camera video virtual-video bath bed camera floorplan heart-empty heart-filled heart-empty-thin heart-filled-thin sofa calculator compass share clock list map-pen map-pin pencil save business-card letter phone heard people pointer cross linkedin google-plus facebook arrow-right close triangle-down my-wink my-wink-thick house-circle loading-spinner bell close-circle dog link pinterest school transport wardrobe arrow-up one two three four five six seven tick

Cash is king?

  The number of buyers purchasing a property with cash is on the up. If you wanted confirmation, you only have to look to the Council of Mortgage Lenders (CML), which calculates that last year there were some 370,000 cash sales, 25% higher than in 2009.   Over the last few years, the number of cash buyers has been on the rise. During the depths of the economic downturn, when mortgage finance was difficult to get hold of, cash was the best – if not the only option – open to buyers. Today, with property prices increasing, investors are choosing to put their money into housing where growth is outperforming many of the more traditional asset classes stymied by historic low interest rates.   In 2006 and before the downturn, mortgage approvals were 14.5% lower than the number of properties sold. By 2008 – the early years of the credit crunch, when both mortgage and sales levels fell – approvals were 42% lower than transactions. In 2012-13 as the mortgage markets, aided by government intervention, began to rally, so the gap narrowed. However, at 31.6% this remains significantly lower than at the height of the market.   And where in London are cash buyers buying' It’s the postcodes of prime central London. Kensington & Chelsea, where average property values at £1.9m are among the highest in the country, is also home to the some of the highest levels of cash purchasers. According to the Land Registry, in the last quarter of 2013 52% of sales in the borough were made with cash. In neighbouring Westminster the figure was almost as high at 46%.   Interestingly, Land Registry data also shows that it’s the more expensive properties that are attracting the buyers. In Q4 2013, 48% of mortgage free buyers bought homes priced at under £500,000, while for properties priced over £2m the figure rose to 55%.

Cash_is_king

 

The number of buyers purchasing a property with cash is on the up. If you wanted confirmation, you only have to look to the Council of Mortgage Lenders (CML), which calculates that last year there were some 370,000 cash sales, 25% higher than in 2009.

 

Over the last few years, the number of cash buyers has been on the rise. During the depths of the economic downturn, when mortgage finance was difficult to get hold of, cash was the best – if not the only option – open to buyers. Today, with property prices increasing, investors are choosing to put their money into housing where growth is outperforming many of the more traditional asset classes stymied by historic low interest rates.

 

In 2006 and before the downturn, mortgage approvals were 14.5% lower than the number of properties sold. By 2008 – the early years of the credit crunch, when both mortgage and sales levels fell – approvals were 42% lower than transactions. In 2012-13 as the mortgage markets, aided by government intervention, began to rally, so the gap narrowed. However, at 31.6% this remains significantly lower than at the height of the market.

 

And where in London are cash buyers buying' It’s the postcodes of prime central London. Kensington & Chelsea, where average property values at £1.9m are among the highest in the country, is also home to the some of the highest levels of cash purchasers. According to the Land Registry, in the last quarter of 2013 52% of sales in the borough were made with cash. In neighbouring Westminster the figure was almost as high at 46%.

 

Interestingly, Land Registry data also shows that it’s the more expensive properties that are attracting the buyers. In Q4 2013, 48% of mortgage free buyers bought homes priced at under £500,000, while for properties priced over £2m the figure rose to 55%.

Related posts

How to go about building an extension

Building an extension can be a sure fire way to add space and value to your property. From planning permission to costs, here’s what you need to know.

Read post

April 18, 2019

Old rectories: the loveliest house in a village

When would-be buyers of country houses dream about their perfect property, what’s often conjured is a handsome, square-built Georgian-era old rectory in a pretty village with its own land and far-reaching views of the surrounding countryside.

Read post

April 10, 2019

Mortgages: what you need to know right now

We catch up with Trinity Financial's Communications Director Aaron Strutt, for an update on how the mortgage market is faring, what trends are appearing, and what rates are currently available for buyers.

Read post

April 04, 2019

Find your Local Office

Find your Local Office

Speak to people who, quite simply, love their patch and love what they do.

Get a Free Valuation

Get a Free Valuation

Thinking of selling or letting your property, or just interested to know what it is worth nowadays?