Cash buyer activity hits decade-high

Cash buyers accounted for the highest percentage of market activity seen in the past decade and, so far this year, they’ve already accounted for a third of all purchases, research suggests.

Yopa has analysed the split between cash homebuyers and mortgage homebuyers in the UK over the past decade, based on Land Registry data.

The data reveals that last year (2023) cash buyers accounted for 34.5% of all property transactions. This was the highest proportion seen since 2013 when the data on cash vs mortgage transactions became available.

In fact, it was only a decade ago when the market split attributed to cash buyers came close to that seen last year, sitting at 33.5% in 2013 and 33.3% in 2014.

More recently, the proportion of market activity attributed to cash buyers has been far lower, sitting below 29% between 2019 to 2022.

The analysis by Yopa also shows that so far this year, cash buyers have already accounted for almost a third of all market activity (32.8%), as higher mortgage rates continue to prove problematic for those looking to climb the ladder with the aid of a mortgage.

Verona Frankish, chief executive of Yopa, said: “Mortgages have become increasingly more expensive since interest rates started to climb and we’re now seeing the result of higher borrowing costs when it comes to buyer trends within the market.

“Not only is it far tougher for those looking to purchase with the aid of a mortgage, but as a result, cash buyers are in a far stronger position within the market making them the first choice for many sellers.

“The good news is that there is light at the end of the tunnel and the broad expectation is that interest rates will start to ease this year. As they do, we expect the market will return to a greater degree of normality when it comes to the cash versus mortgage buyer balance.”