Cash Property Buyers Make their Mark in UK

Cash buyers were behind four in 10 property purchases in 2013, according to research that underlines the limited powers of the Bank of England to prevent a housing bubble by raising borrowing rates or restricting conditions for mortgages.

Analysis by the Intermediary Mortgage Lenders Association (Imla) found that the proportion of home purchases funded by mortgages dropped to 62% last year, the lowest level since 2005 when comparable data was first available.

The figures come days after the bank’s governor, Mark Carney, said it would be impossible to control price inflation in the London market because of the high proportion of cash buyers. Prices are also being pushed up by a limited supply of properties for sale, and new figures from the government show that the number of homes completed last year in England dropped by 5% to 109,370 – fewer than half the number experts estimate is needed to cater for demand.