Six in 10 (59%) buy-to-let purchases in Great Britain were mortgage free so far this year, said Hamptons.

This is the highest share in six years and up from 53% in 2022, said the estate and lettings agent.

It found that investors are adapting, ‘against a backdrop of higher mortgage rates’, with new investors choosing cash.

Southern England sees cash boost

The cash buyer trend is particularly evident in the lowest yielding parts of the country, such as the South of England, said Hamptons.

A record 71% of buy-to-let purchases in areas where the average gross yield is less than 5% were mortgage free so far this year, up from 50% in 2022. This lead to 61% of investor purchases in the four Southern regions (London, South East, South West and East of England) being made in cash, up from a low of 47% in 2022.

In contrast, in the North of England, cash purchases have fallen year-on-year, from 62% in 2022 to 60% in 2023.

For the first time since Hamptons’ records began, a landlord buying in the South of England is more likely to be a cash buyer than an investor buying in the North where prices are lower.

High rents

Rents across Great Britain hit another record high in February, averaging £1,230 pcm for a newly let home. This is up 10.0% year-on-year.

Rental growth accelerated last month too, said Hamptons, marking the second strongest rate of growth recorded since its lettings index began.

The annual increase will cost the average tenant who moves into a new home in Great Britain an additional £1,344 each year.