In contrast to London, the majority of property purchases nationally are made with a mortgage. Cash buys accounted for only 27% of property purchases in Britain in August 2010.
The proportion of cash buyers in central London has also grown during 2010, suggesting there is no slowdown in demand on the cards for prime properties. In February this year, cash purchasers accounted for 58% of the total buyers in areas such as Chelsea, Kensington, Westminster and Mayfair. The number of property sales in the capital has risen at the same time, increasing 30% from February 2010.[1
Peter Rollings, Managing Director of Marsh & Parsons, said: “The shortage of mortgage funding on offer is the biggest threat to the recovery in the UK housing market, stifling demand from buyers. But, while the market may be starting to run out of steam in some parts of the country, London continues to perform strongly. Demand from cash rich buyers, both from the UK and abroad, looking for strong and safe returns, is buoyant and this is helping to keep activity levels high. Central London is in many respects insulated from the national mortgage drought.”
Mortgage lending in the UK remains cripplingly low. In August 2010, the number of house purchase loans issued by lenders nationally stood at 51,600 – 53% lower than in August 2006.
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