Cash landlords at highest levels in 10 years

Cash landlords at highest levels in 10 years
On average landlords sell a home once every 17 years meaning as prices have increased, a significant amount of wealth has built up in the sector.

The proportion of landlords paying in cash for a property reached 61% in January 2017, the highest since records began in 2007.

Landlords who have chosen to buy since the introduction of the 3% stamp duty surcharge in April 2016, have relied more heavily than ever on cash to fund their purchases. Over the last decade the proportion of landlords buying with cash has steadily increased. In 2007 just 41% of landlords bought a home without a mortgage, a figure which peaked at 58% by 2010 before dropping back.

Landlords buying homes in the North of England are most likely to use cash to fund their purchase. 70% of landlord purchases in the North West of England are in cash, a larger proportion than anywhere else. In similar fashion to those who buy a home with cash to live in themselves, London landlords are most likely to use mortgage finance. As house prices in the capital have risen, there has been a correspondingly sharp fall in the number of landlords not using a mortgage.

Cash purchases drive the top and bottom of the rental market with the most and least expensive homes most likely to be bought with cash. Over the last year almost two thirds of homes (65%) costing less than £125,000 were paid for in cash.They were closely followed by the 64% of landlords who paid in cash for homes costing £1,000,000 or more. Around a quarter (24%) of all landlord cash purchases were funded by the sale of another property elsewhere.  

In January 2017 the cost of a new let was 2.6% higher than in the same month last year, the fastest January increase for two years.  This January saw 36% of landlords increase the rent when signing a new tenancy, up from 27% last year. Rental growth has been led by areas outside London, with rents in the capital 2.7% lower than they were last year. The three regions with the fastest growing rents were Wales (up 8.8%), the South East (up 8.2%) and the East of England (up 7.8%).


Johnny Morris, Research Director at Countrywide, said: “On average landlords sell a home once every 17 years meaning as prices have increased, a significant amount of wealth has built up in the sector. This is now fuelling cash purchases.  With the forthcoming tapering of tax relief on mortgage interest payment, landlords have less of an incentive to borrow, suggesting more cash activity in 2017.

Rents are rising at twice the pace of last January and there are signs that rental growth is starting to pick up in much of the country.  Ten months after the introduction of the stamp duty surcharge the number of homes on the rental market is showing signs of coming down.  If this fall continues over the next few months, it is likely to support rental price growth.”

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brandonlee10
brandonlee10 24 Jul 2017

The financial ramifications of the triggering of Article 50, the starting gun for Britain's departure from the EU, are far from clear. Buyers will be most cautious in London, given that buying a home in...

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IrisJ.
IrisJ. 19 Jul 2017

Great advice, but may I also add that when buying an already built home, make sure you do all of the proper inspections. Most importantly pest inspection because people tend to get surprised when they

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IrisJ.
IrisJ. 17 Jul 2017

The third point is, in my opinion, the most important one. People have become too inconsiderate and careless when it comes to rented properties. If a landlord wants to protect their property, regular visits...

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cornishalan
cornishalan 10 Jul 2017

Added to the cost of purchasing these village properties are the above average maintenance costs. Particularly where the property is a listed building or requires specialist building skills such as thatching...

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Jo Mullett
Jo Mullett 07 Jul 2017

Here in Swansea, known as the Japanese knotweed capital of the UK, it never fails to amazes me that people have no idea of the potential problems this invasive non-native plant can cause when buying or...

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NathanG
NathanG 05 Jul 2017

McDonalds, for example, have been purchasing their real estate on prime locations for years. If something happens to the company they'll have invaluable assets that will be able to save them. We might

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Jonah
Jonah 04 Jul 2017

Graham: surprised to see you cite the "extra tax liability" as capping out at ?560. It doesn't - the extra tax is exponential, as it is levied on the income (i.e the inflating level of rental income you...

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Dianne Griffen
Dianne Griffen 29 Jun 2017

Be very wary of anyone bringing you deals that they have ?found? and want to ?sell on to you? or ?joint venture? with you on ? you need a proper legal contract for this, involve a RICs surveyor to confirm...

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jason hadzikostas
jason hadzikostas 28 Jun 2017

The most important thing is a budget. Students have to manage their spendings in food, house maintenance, books and many other things. According to me, student Studios are the perfect option for them as...

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SecomTech
SecomTech 22 Jun 2017

AT Last...This was discussed years ago and there was a move towards landlords registering their bad tenants on a database..(can't remember where) It seems a logical step though our leaders will probably...

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Bertrand
Bertrand 02 Jun 2017

How about the Welsh Govt introducing a scheme to protect landlords against "rogue" tenants who are then taken to court for criminal damage to the properties they trash. Pretty unlikely I suspect and politically...

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AmberMorris
AmberMorris 25 May 2017

"Please don't pick a novelty tune-playing doorbell. They're not 'fun'. They're stupid." Laughed a lot to this. It's actually true, though.

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