There’s been another fall in the proportion of landlords purchasing their next buy to lets in cash.

Research by Hamptons lettings agency shows that the share of buy to lets bought with cash peaked at 62 per cent in 2017, but the proportion has fallen in each subsequent year since then. 

It was 60 per cent in 2018 and 58 per cent in 2019.

The latest figure suggests that the stamp duty holiday has accelerated this trend with just 52 per cent of landlords purchasing with cash in 2020.  

Small and first-time landlords are most likely to take advantage of the holiday, typically those who rely on mortgage finance to fund their purchases.

As a consequence of the stamp duty holiday which came into effect on July 8 last year, the final six months of 2020 saw the proportion of cash buying landlords fall to just 50 per cent – a record low – as many new investors took out mortgages to take advantage of the exemption.

Across 2020 as a whole cash landlords spent a total of £11.7 billion on new buy to let purchases – that’s £1.5 billion less than in 2019 and down from a record £19.8 billion in 2015.  

To put this figure into context, first-time buyers bought £65 billion worth of property last year.

Landlords buying in Great Britain’s least expensive regions remained most likely to fund property purchases in cash during 2020.  

Almost two-thirds of buy to let purchases in Wales were in cash.  They were followed closely by investors from the North West and the North East.

In contrast, investors in the most expensive regions of the country were most likely to rely on mortgage finance. Just 39 per cent of London landlords and 45 per cent of those in the South East paid cash for their buy to let last year.