Record 40% of homes bought for cash

Houses purchased for cash in January accounted for a record 40% of total property sales, new figures have shown.

A report by the Council of Mortgage Lenders (CML) found that the proportion of properties sold to people who did not need a mortgage to make the purchase more than doubled in the past five years.

According to the report, house sales involving cash buyers accounted for just 18.7% of total sales in June 2005 - the first month for which data is available.

The CML said that a steep fall in net mortgage lending from £108 billion in 2007 to just £8.4 billion last year led to a fall in the number of people borrowing money to fund their house purchase.

It said as the number of people buying a property with a mortgage declined due to the lower lending levels, the proportion of sales that went to cash buyers had increased.

It added that the number of cash buyers had remained broadly unchanged, at 22,267 in April 2005 and 21,825 in January this year, although there are considerable monthly fluctuations.

A spokeswoman for CML said: "The number of cash purchases has not changed very much. Property transactions are lower than a few years ago, so cash purchases account for a higher proportion of sales than previously."

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