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Increase in cash funding for property purchases


According to a new analysis of transactions and mortgage lending by the Intermediary Mortgage Lenders Association, cash is fast becoming an increasingly large proportion of the funding used to buy homes.

The figures show the total value of residential house purchases in the UK reached £261 billion in 2016 with £152 billion provided by mortgage finance and £109 billion made up of cash funds including the proceeds of existing property sales.

Cash was shown to provide 41.8 per cent of funds for residential purchases – £418 in every £1,000, which was up from 37.7 per cent in 2013.

In effect, this indicates that while 2016 house purchase lending was up five per cent overall from 2015 and up 32 per cent since 2013, the total sum of cash injected into residential property rose significantly faster: the sum has risen by 57 per cent in three years. This trend comes despite government first-time buyer initiatives in recent years such as the Help to Buy schemes which have helped borrowers with deposits as small as five per cent to buy their own homes.

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