UK housing prices are reportedly on the rise along with property cash buyers. According to an analysis conducted by Nationwide building society, about four of every 10 properties purchased in the first three months of the year were paid for in cash. This is the highest ratio on record for cash transactions since 2005, according to a news report from theguardian.com.
Nationwide Chief Economist Robert Gardner said, "Following the crisis, there was a sharp fall in the number of mortgaged purchases. Credit conditions meant that some people who wanted mortgages could not get them, but there was also less appetite because of the conditions in the labor market."
Despite such trend, the highest proportion of cash buyers, or about half of total purchasers, was located in the North East region of England. According to a report from bbc.com, the second highest volume was in the South West region of England. London, the nation's capital, was just a tad above the national average, the news report stated.
Gardner hinted that the high level of cash transactions in the South West may be due to the large population of elderly individuals located in the area who own their homes outright. The purchase may reportedly be due to the individuals' option of moving to a smaller home, thus avoiding the need for a mortgage.
Overall, housing transactions fell by 5 percent year on year in the first three months of 2015. Mortgage fulfillment also declined by 11 percent. In May, the latest housing index indicated that home prices rose in the UK and had crept to £195,000 on the average.
Gardner added, "Over the longer term, we would expect house price growth to converge with earnings growth, which has typically been around 4 per cent per annum."
