A record number of U.K. landlords paid in cash for their rental properties last month.
A report Sunday by U.K. based real estate consultancy Countrywide found that the proportion of landlords paying in cash for a property reached 61% in January. This was the highest since it started collating this data in 2007.
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"On average, landlords sell a home once every 17 years, meaning as prices have increased, a significant amount of wealth has built up in the sector. This is now fuelling cash purchases," Johnny Morris, research director at Countrywide, said in a news release.
Over the last decade, the proportion of landlords buying with cash has steadily increased in the U.K. In 2007, just 41% of landlords bought a home without a mortgage, a figure which peaked at 58% by 2010 before dropping back.
Mr. Morris added that with the U.K. government’s incoming measure to taper off tax relief on mortgage interest payments, landlords have less incentive to borrow, suggesting more cash transactions in 2017.
Cash purchases drive the top and bottom of the rental market, with the most and least expensive homes most likely to be bought with cash, according to Countrywide’s research.
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Over the last year, almost two thirds of homes costing less than £125,000 ($156,000) were paid for in cash, which was closely followed by 64% of landlords who paid in cash for homes worth £1 million ($1.24 million) or more.