Number of mortgage free house purchases falls to record low

The figure has fallen by 5% over the past two years and is down from a peak of 36% recorded in 2009.

Every region in Great Britain recorded a fall in cash sales over the last two years. The West Midlands recorded the biggest decrease in the proportion of homes bought with cash at -9%, followed by London with a fall of 7%. Scotland recorded the smallest fall, with the proportion of homes bought mortgage free decreasing 1% since 2017.

The South West remains the region with the highest proportion of cash sales; 34% of homes were purchased with cash in H1 2019.

In West Somerset, more than half (58%) of homes in the local authority were purchased without a mortgage in H1 2019, 7% less than in H1 2017. West Somerset was followed by Ceredigion (57%), Torridge (53%), West Dorset (53%) and North Norfolk (53%).

Meanwhile London had the lowest proportion of cash sales – just 19%, which is 8% lower than 2009 when cash buyers in the capital peaked.

Ten years ago buy-to-let investors accounted for 32% of cash buyers, but during the first half of 2019 only 24% of cash purchases were bought as a buy-to-let. The majority (68%) of homes bought with cash this year were purchased by homeowners wanting to live in the property.

Aneisha Beveridge, head of research at Hamptons International, said: “The proportion of homes bought with cash has fallen to the lowest level on record. Although transactions have fallen this year, cash purchases decreased even further. Just 28% of homes were bought without a mortgage in H1 2019, significantly lower than the peak of 36% recorded 10 years ago.

“The fall in cash purchases not only reflects tighter affordability, but also a decrease in activity amongst downsizers, the group of people most likely to have built up enough equity to purchase property with cash. It also reflects a drop off in the number of homes bought by investors, many of whom used cash to purchase their properties.”