In these 3 boroughs – Kensington and Chelsea, Westminster and City of London – half of all home purchases are in cash rather than mortgages.
On average, higher prices are being paid in cash than with a mortgage for homes in London. But the CML says that is due to the distorting effect of very high prices being paid in cash for a small number of homes in these central areas. Central London has been the prime area for foreign investors and Kensington and Chelsea tops the table for houses bought as second homes, as reported here.
And this is a tale of 2 Londons as away for the centre cash plays a far less significant role in the property market with around three quarters of homes being bought with a mortgage.
The level of reliance on mortgages is greater in London than any other region of the country. According to CML calculations, in the South West of England 40% of homes are being bought with cash.
Last year the number of cash purchases in England and Wales overtook the level before the financial crisis but the CML says that the number of mortgage-funded purchases is still below the level of 2007.
This may be down to demographics that are sharply on show in London, where increasingly it is older people who can afford to buy a home. Older people have traditionally been more likely to be cash buyers, selling one home to purchase another outright, and data from the Land Registry show that most cash purchases are made by those over 55.
As previously reported by Urbs, the proportion of those who own their own home has fallen for all age groups in London except the over 55s.
The Office for National Statistics forecasts that there will be 1 million more people aged 55-64 in the next 5 years, so the proportion of houses bought for cash is likely to keep rising.