Over the last year, landlords buying in cash have spent more than at any time in the past decade, according to new figures.
The number of landlords buying in cash has continued to rise with £21 billion worth of homes bought this way over the last year. This is £0.2 billion more than in 2016 and a 32% increase on 2007 when only £15.9 billion was spent.
Many landlords have re-mortgaged to take equity out of homes they already own.
65% of all homes bought by a landlord in the last 12 months were paid for in cash which has surpassed the previous high of 60% set in 2011.
This is the highest figure since Countrywide’s records began in 2007.
Landlords in Northern England and Scotland are the most likely to buy in cash with 78% of privately rented homes in the North East paid for in cash. Cash landlords spent £3.17 for every £1 spent by a landlord using a mortgage.
On the other hand, landlords in London are the most likely to use a mortgage. This is also the only region where mortgaged landlords outspent cash buying landlords at £1 for every 67 pence.
The cost of the average new let has risen 0.5% over the last year to reach £958 per month, despite the annual rate of rental growth slowing between September and October.
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.”