Rise of Cash Purchases Outside London: A New Trend

Explore the growing trend of cash purchases outside London and its implications for the property market and economic landscape.

The phenomenon of cash property transactions is increasingly becoming a prevalent trend beyond the confines of the capital, as elucidated by a recent study conducted by UK mortgage broker SPF.co.uk. This shift appears to be intricately linked to the rising mortgage rates, which have rendered cash purchases not only more appealing but also financially advantageous compared to the burdensome obligations of mortgage repayments.

In the picturesque region of Inverclyde, Scotland, a staggering 50.1% of property sales in 2023 were executed in cash, a notable increase from a mere 36% a decade prior in 2013. The average property price in this area stands at £123,000, with first-time buyers typically investing around £100,000 for their inaugural homes as of April 2024—a figure that might prompt one to ponder the wisdom of such a financial commitment.

Meanwhile, in the charming locale of Hart, Hampshire, the trend is similarly pronounced, with a remarkable 26.1% uptick in cash buyers over the past decade. In 2023 alone, the Land Registry reported that 379 properties were acquired through cash transactions, constituting 33.5% of all property sales. Here, the average property price is a staggering £467,000, a figure that eclipses the national average of £285,000 by an astonishing 63%. One might jest that purchasing a home in Hart could require a small fortune—or perhaps a generous benefactor.

The West Midlands' Solihull has also witnessed a significant surge in cash sales, which accounted for 35.8% of all properties sold last year, up from 28.6% in 2013, culminating in an overall increase of 25.4%. The Office for National Statistics (ONS) reports that the average property price in Solihull is £337,000, which is a hefty 47% above the average price in nearby Birmingham, currently pegged at £228,000. One could argue that the allure of Solihull's real estate market is akin to a siren's call, luring buyers with promises of prosperity.

Conversely, Harlow in Essex has experienced a rather disheartening decline in cash purchases, with a staggering 44.9% drop in the proportion of cash transactions over the same period. According to ONS data, the average house price in Harlow is £309,000. In 2013, cash purchases represented 26.3% of all property transactions, but this figure plummeted to a mere 14.5% by 2023. It seems that Harlow's once-thriving cash market has taken a turn for the worse, leaving potential buyers to wonder if they should be searching for treasure maps instead of property listings.

The landscape of property transactions in the UK is undergoing a seismic shift, with cash purchases gaining traction in various regions while others, like Harlow, grapple with a decline. As the market evolves, one can only speculate on the future dynamics of home buying—perhaps a return to bartering with chickens and goats is not entirely out of the question.