UK property cash buyers set a new record…
The first quarter of 2015 has delivered a record result for UK property purchased by cash-only buyers reaching nearly 4 in 10.
A post on the BBC News website shows figures for the proportion of cash buyers released by Nationwide, peaking at 38%, an increase of 2% on the average for 2014. This has largely been attributed to the recent tightening of mortgage lending and historically low and competitive interest rates.
According to Nationwide’s data, it appears that the impact of the financial crisis had almost instantly contributed to the number of cash transactions, without a requirement for a mortgage, shooting up dramatically.
The Chief Economist at Nationwide, Robert Gardner, explains that cash transactions would not have been affected by tighter credit controls or high unemployment:
“Continued healthy demand from cash buyers has helped to support transaction levels in recent quarters, since mortgage lending has remained relatively subdued.
“For example, in Q1, overall housing transactions were down by around 5% compared with Q1 2014, while mortgage completions were around 11% lower.
“The significant rise in the share of cash transactions occurred in the wake of the financial crisis, where a tightening in credit conditions and a deterioration in the labour market limited the number of people able to buy with a mortgage.
“The low interest rate environment is likely to have supported the flow of cash into other asset classes in recent years, including UK residential property.”
Comparing Nationwide’s regional statistics from 2013, the East of England matched London by hovering around the national average mark of 36%, whereas the North East had the biggest share of cash buyers at 50%, followed by the South West.
The BBC’s post can be read here.
The link to Nationwide’s latest House Price Index Report is here.