Spending by cash landlords at 10 year high

Spending by cash landlords at 10 year high

The rising number of landlords buying in cash means that over the last year they spent more than at any time in the last decade.

Over the last 12 months landlords buying in cash bought £21.0 billion worth of homes which is £0.2 billion more than in 2016 and a 32% increase on 2007 when they spent £15.9 billion.  Much of this cash has come from landlords remortgaging to take equity out of homes they already own.  
 
The proportion of landlords buying in cash has steadily increased over the last two years. Over the last 12 months 65% of all homes bought by a landlord were paid for in cash, surpassing the previous high of 60% set in 2011. This is the highest figure since Countrywide’s records began in 2007, a year when 60% of buy-to-let purchases were paid for with a mortgage.


Landlords buying in Northern England and Scotland are most likely to buy in cash. Seventy-eight per cent of privately rented homes bought in the North East over the last 12 months were paid for in cash, with cash landlords spending £3.17 for every £1 spent by a landlord using a mortgage.  Landlords buying in London are the most likely to use a mortgage.  London is the only region where mortgaged landlords outspent their cash backed counterparts - £1 for every 67p.
 
The annual rate of rental growth slowed between September and October with the cost of the average new let in Great Britain rising 0.5% over the last year to reach £958 per month.  Excluding London however, where rental growth dipped back into negative territory, rents rose 1.2% over the last 12 months. The Midlands and Wales continued to be the drivers of rental growth, where rents rose 2.2% and 2.6% respectively over the last year.
 
Johnny Morris, Research Director at Countrywide, said: “Landlords have increased their housing wealth considerably over the last 10 years. This means cash purchases are steadily becoming a bigger part of the market.  But a landlord buying with cash will often have a mortgage either on their personal home or other properties in their portfolio.  Rising prices have allowed landlords to take equity out of both their personal or other rental homes to expand their portfolios.  
 
Rental growth across Northern England has slowed under pressure from record numbers of new landlords.  But it’s a different story across the Midlands and parts of the South where rents are once again nudging upwards.  It looks like the last effects of the investor stamp duty surcharge have finally worked their way through the system.”

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Scott Garnet
Scott Garnet 06 Nov 2017

If you have a patio or a porch it is important to make sure that any connecting doors are secured. Good advice for sliding glass doors is replacing the panels with storm resistant glass and getting heavier...

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richardrawlings
richardrawlings 01 Nov 2017

What has not been mentioned here is the effect of not only higher interest payments, but also that these payments are less likely to be offsettable as a business cost due to the scaling back of mortgage...

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Kelvin Lloyd
Kelvin Lloyd 09 Oct 2017

IT is up, to the Planners. If they will only give permission for bungalows on certain (suitable) sites, they will be built.

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maggie swift
maggie swift 09 Oct 2017

It's just the beginning of the shocking rise.

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maggie swift
maggie swift 09 Oct 2017

I have recently read that the bungalows can provide social housing for elderly residents in London.

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zoe glover
zoe glover 05 Oct 2017

Update! Worst company I have ever dealt with. Undervalued a Cambridge property by over 100k, wont take on any evidence of valuation including a RICS valuation done 3 years ago for the very same value...

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Paul Edwards
Paul Edwards 27 Sep 2017

Its nonsense articles such as this that make it harder to get clients to realise just how difficult the market is out there. When you see Rightmove and there are more 'price reduced' then 'new' most days...

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Tom Allen
Tom Allen 20 Sep 2017

Absolutely agree with you!

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RyanGeo
RyanGeo 18 Sep 2017

A sharp correction would be a less dramatic expression to use. That is already underway in certain sectors in Reading where I practice as Chartered Surveyor

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sean benton
sean benton 01 Sep 2017

Identity theft is a thread for any profession. So,people should stay alarmed. I once take help from a letting agent and came to know that letting agents are taking every precaution to prevent fraudulent...

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Mark N.
Mark N. 30 Aug 2017

We have seen a surge in instructions over August and that should continue into September too.

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Chris
Chris 30 Aug 2017

Unfortunately, all the legislation bears its force on Landlords and ignores, naively, the effect of Rogue Tenants on the ability of landlords to keep houses in repair and offer properties for rent at reasonable...

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