More landlords paying cash for property

 
More landlords paying cash for property

There has been an increase in the number of landlords expanding their portfolios by buying property for cash.

An index report from Countrywide shows 65 per cent of landlords purchased property in cash - the highest level in a decade.

The majority of cash purchases were made in the North East, with the lowest percentage of cash purchases made in London.

Over the past 12 months, landlords have paid cash for £21 billion worth of property - £0.2 billion more than in 2016 and 32 per cent more than in 2007.

Countrywide’s report also showed rents are continuing to rise, especially in the Midlands and Wales. The latter saw a 2.6 per cent rise for reach an average of £658, compared to £791 in the South West.

“Landlords have increased their housing wealth considerably over the last ten years. This means cash purchases are steadily becoming a bigger part of the market,” said Johnny Morris, research director at Countrywide.

“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,” he explained.

He added: “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.