The amount of cash funding purchases of UK houses has hit a post-recession high, according to new research, highlighting the growing role of the "Bank of Mum and Dad" in the country's property market.
According to the Intermediary Mortgage Lenders Association (IMLA), the amount of cash ploughed into UK property jumped up by 12 per cent between 2015 and 2016 to a total of £109bn.
The growth in cash funding outstripped the increase in mortgage lending over the same period, which was up five per cent. IMLA said the acceleration in cash contributions meant £418 in every £1,000 spend on homes in the UK last year came in the form of cash.
The surge in cash buyers comes despite the government's interventions to help first-time buyers onto the housing market, and increasing mortgage availability. Banks and building societies are in fierce competition for buyers, pushing down rates. HSBC, for example, recently launched the lowest fixed five-year mortgage rate on the market.
Peter Williams, executive director of IMLA, said:
We are seeing a number of flexible product come to market to help make home-buying more accessible, for example using family guarantors, but there are limits to which flexible lending solutions can compensate for continuing structural flaws in the housing market with all the social implications that entails.