The rise of the cash buyer
Latest research shows cash buyers are driving the housing market growth
Alex Johnson has been part of The Independent's online team since 2007. He has been writing about microarchitecture on his internationally-acclaimed Shedworking blog since 2006 and is the author of Shedworking: The Alternative Workplace Revolution. His latest book is Bookshelf, published by Thames & Hudson.
Thursday 27 March 2014
Cash buyers are the most active buyer group and are pushing rises in transactions and prices, says Hamptons International.
Its latest figures shows that during 2013 the number of cash buyers grew by a third, with 350,000 properties bought with cash, around 36 per cent of the market in England and Wales.
"Cash buyers have been at the vanguard of the housing market recovery in recent months," said Johnny Morris, Head of Research at Hamptons International, commented, "with the number of cash buyers increasing at a faster rate than those purchasing with a mortgage.
Hamptons' research also shows that 70 per cent of cash buyers in 2013 were not selling a property to fund their next purchase.
"The increase in numbers of first time and cash buyers without a property to sell has meant fewer homes coming to the market," added Morris. "Low levels of stock have been a factor driving rapid price increases, particularly in the South of England. Until we see more owners moving home, who have properties to sell as well as buy; the shortage of homes for sale is likely to continue. The result being that 2014 looks to remain, resolutely a sellers’ market."
Figures released today by the Mortgage Advice Bureau suggest house price inflation has slowed for new builds under Help to Buy 1. Its analysis indicates that the annual growth of new build prices across the UK has fallen from four per cent to two per cent in the last year.
Andy Frankish, new homes director at Mortgage Advice Bureau, said: "Buyers are taking advantage of government help to make entry-level purchases rather than chasing properties at the top end of the market.
"The scheme’s arrival has also worked wonders to keep the costs of buying a new build home down. Improving the supply of housing is having an immediate and powerful effect on house prices by keeping inflation in check and avoiding a scenario where aspiring owners are priced out of the market."
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