Cash buyers for London homes plummet as bonuses dwindle

 
Ben Southwood
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EXCLUSIVE

THE PROPORTION of cash buyers buying property in central London slid by over a quarter in 2012, City A.M. can reveal.

Cash buyers accounted for 74.2 per cent of those buying prime central London properties in 2011, but this plummeted to 48.8 per cent last year, according to figures from estate agent Cluttons.

“Banks are facing pressure from regulators, government, shareholders and the public to clean up their act, which has resulted in a softening in the big bonus culture,” Cluttons head of research Sue Foxley said.

At the same time, the proportion of mortgaged buyers doubled from 25.8 per cent in 2011 to 51.8 per cent in 2012, Cluttons said.

And this trend is not a one-off, the estate agent said.

It said that political issues surrounding bonuses were only intensifying, and as a result it predicts an era of far more modest price increases in the most desirable London properties.

Prices will grow just four per cent in 2013, Cluttons said, and capital values will only climb 22.1 per cent over the next five years.

The upshot of this is that renters will get a reprieve, with rents expected to rise just 1.5 per cent over the coming year.