This makes up 13 per cent of the three million people planning to buy in February. A similar number are undecided as to whether they will need a loan to purchase their home.
mform.co.uk said that although cash buyers will include the very wealthy - some of whom have benefited from massive City-style bonuses from work - the vast majority will be downsizing to purchase a cheaper property and plan to spend or invest the remaining equity in their home. Department of Communities and Local Government figures show the average house is now worth £205,286 compared with £156,275 in July 2003, a 30 per cent growth in three-and-a-half years.
Older homeowners are likely to be the main beneficiaries and this is reflected in the fact that 49% of people aged 50 and over who were interviewed and are planning on buying a new home, claim they will not need a mortgage. The corresponding figures for younger homebuyers interviewed aged between 30 and 50 was 6% and unsurprisingly for borrowers 29 and under are just 1%.
Eamonn Rice, mform.co.uk chief executive, said: “Property prices are such that many people cannot afford a home but rising property prices has meant that many people have become well-off and a number are cashing in on this by purchasing cheaper properties and releasing equity.
“Anyone who bought a house in the 1980s is certain to have seen massive growth in the value of their home and may now be in a position to cash in and move to a smaller house or relocate to a cheaper area. Downsizing makes financial sense.
“Cash buyers are set to play a significant role in the housing market over the next six months and those who aren’t lucky enough to be mortgage-free need to take note.
“Cash buyers are in the comfortable position of not having to worry about mortgages and can take a more relaxed attitude to buying and selling. As they are generally not in a chain their deals can go through more smoothly and they are inevitably more popular with sellers and estate agents.”
