LATEST research from Hamptons International shows that cash buyers and first time buyers are leading the housing market recovery.
Cash buyers and first time buyers are more active than any other buyer groups and are driving growth in both housing market transactions and prices, according to new research from the leading residential agent.
Over the course of 2013, Hamptons International’s research showed the number of cash buyers grew by 33 per cent while data from the CML shows the number of first time buyers with a mortgage grew by 23 per cent.
In 2013, 350,000 properties were purchased with cash, equating to 36 per cent of the market in England and Wales, the highest number since 2007. Meanwhile, 28 per cent of the market was accounted for by first time buyers with mortgages.
Johnny Morris, head of research at Hamptons International, commented: “Cash buyers have been at the vanguard of the housing market recovery in recent months, with the number of cash buyers increasing at a faster rate than those purchasing with a mortgage.
“At a time when the number of properties available to buy is five per cent lower than this time last year (in London this figure rises to 20 per cent) Hamptons International’s research highlights how the increased activity of cash and first time buyers is an important contributory factor to the shortage of stock.
“While some cash buyers — such as downsizers — will release a home for sale at the same time, so there is no net effect on the stock of property for sale, others — such as second home buyers or buy-to-let investors — snap up available stock for sale, without adding to it, at least in the short term. Hamptons International’s research shows that 70 per cent of cash buyers in 2013 weren’t selling a property to fund their purchase at the point of sale.
“The increase in numbers of first time and cash buyers without a property to sell has meant fewer homes coming to the market. 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 seller’s market.”