Cash buyers have accounted for around a third of home sales in 2023 – Zoopla

Cash buyers have accounted for around a third of home sales in 2023, according to a property website.

Those using cash to buy a property are on track to account for around 32% of sales in 2023, compared with a fifth (20%) on average between 2017 and 2022, Zoopla said.

Cash buyers are thought to be accounting for a larger proportion of sales for several reasons, including people in this group often being older, wealthier buyers who are less reliant on a mortgage.

Cash buyers also tend to purchase cheaper properties, Zoopla said.

The average home purchase with a mortgage is around £304,000, while the average cash purchase is just under £275,000.

Mortgage rates jumped as the Bank of England base rate underwent a string of increases, but towards the end of 2023 there have been signs of fixed rates easing as inflation slows.

The Bank of England uses rate rises as a tool to quell inflation. The easing of rates could inject some fresh confidence into the housing market.

In signs of a pre-Christmas pick-up, Zoopla also said that in the four weeks to December 17, the volume of new sales being agreed has been 17% higher than the same period in 2022.

Richard Donnell, executive director at Zoopla, said: “The housing market has been more resilient than many expected over 2023 but it hasn’t been a surprise to us.

“Mortgage regulations introduced in 2015 have stopped an over-valuation of housing which is why the decline in house prices has been modest over the year.

“House price falls have been concentrated in the South and Midlands while prices are still slightly higher over the year in Scotland and Northern Ireland.

“UK housing still looks expensive by historic standards which is why we expect UK house prices to fall a further 2% over 2024 as prices and incomes re-align.”

Tom Bill, head of UK residential research at Knight Frank, said: “The final weeks of 2022 were marked by the fallout from the mini-budget, when the property market effectively closed three months early for Christmas.

“This year, it is stirring into life after a subdued summer and all the indications are that there will be a seasonal bounce next spring provided a general election is not called in the first half of 2024.”

Matt Thompson, head of sales at London-based estate agent Chestertons, said: “December tends to be a quieter time of year in terms of property transactions but buyers have been more motivated this month to continue their search. Built-up demand caused by this year’s economic uncertainty is a key reason for this delay in buyer activity and indicates that 2024 will start off with a very active property market.”

Nathan Emerson, chief executive of property professionals’ body Propertymark, said: “There is little denying the housing market has been turbulent across the last 12 months, mostly driven by high inflation and subsequently higher interest rates as a knock-on effect.

“Propertymark are optimistic the wider economy has hopefully reached that point of change and it is extremely positive to see sales volumes starting to gain momentum once again compared to this time last year.

“We must remain vigilant over the coming months, however as inflation continues to dip we should start to see this translate into lower interest rates and this will be the point the UK housing market gets fully into gear once again.”