According to new figures from Hamptons International, less than one in five properties is bought outright without a mortgage, down from 26 per cent in 2013
Cash buyers are on the wane in much of London. According to new figures from Hamptons International, less than one in five properties is bought outright without a mortgage, down from 26 per cent in 2013.
It’s an indication that cash-rich older homeowners are staying put in their big family homes instead of downsizing to a property that they could buy outright.
Cash buyers bought 19.9 per cent of homes in the first quarter of this year — the first fall below 20 per cent since Hamptons first started collecting the data in 2012.
In some London boroughs the decline of the cash buyer has been dramatic, with Waltham Forest seeing the biggest fall of all, from 20 per cent in 2013 to just 11 per cent in the 12 months to this June.
The fall has also been particularly steep in Barking & Dagenham, from 17 per cent to nine per cent, and also in Lewisham, where it dropped from 20 per cent to 12 per cent.
Hamptons analyst Aneisha Beveridge said house buying habits are changing. While younger buyers needing large mortgages are increasingly moving into cheaper areas in south and east London such as Walthamstow and Barking, older owners who do not need to borrow are tending to stay in the family home rather than buy smaller.
The findings follow analysis from Nationwide last month showing that more than half of homeowners are now living in “underoccupied” properties with at least two spare bedrooms, a marked increase over the past two decades.
Among over-65s more than two thirds of homes have at least two spare bedrooms, suggesting that more of the elderly are opting to stay in their properties long after their mortgages have been paid off.
It follows figures published yesterday showing that more mortgages were approved by banks in July than in any month for 10 years, with record low interest rates and the uncertainty of Brexit encouraging buyers to take out home loans.
According to Hamptons, just three local authority areas in the capital have seen an increase in cash buyers since 2013.
These are Kensington & Chelsea, the City and Westminster. In Kensington & Chelsea the proportion rose from 49 per cent to 54 per cent, making it the only borough where more buyers pay wholly with cash than with a mortgage.
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