Nearly 40% of homes in the UK were purchased with cash during the first quarter of 2015, new figures have revealed.
Robert Gardner, Nationwide Building Society's chief economist, said 38% of homes were bought without a loan, at a time when property prices continued to increase. House values rose 0.3% month-on-month in May, bumping up the average house price even further than previous records.
He said: "Continued healthy demand from cash buyers has helped to support transaction levels in recent quarters, since mortgage lending has remained relatively subdued."
Nearly 40% of homes in the UK were bought with cash during the first quarter in 2015
Although the increase in cash purchases was a new record, it was only 2% higher than in 2014.
Mr Gardner said: "The significant rise in the share of cash transactions occurred in the wake of the financial crisis, where a tightening in credit conditions and a deterioration in the labour market limited the number of people able to buy with a mortgage."
He said the low interest rate environment in recent years, which has resulted in poor returns for savers, is likely to have supported the flow of investors' cash into property.
The high cash purchase figure was last recorded in 2011, according to figures from the Council of Mortgage Lenders, reported by the BBC. At that time the rate had more than doubled since 2005, when records began.
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UK property sales
According to Nationwide, UK property values increased to £195,166 on average, surpassing an all-time high of £193,048 the previous month. April was the first time Nationwide had recorded typical UK house prices over the £190,000 mark.
Despite the jump, the figures also showed house price growth had slowed. In May it was 4.6%. In April last year it was 5.2%.
Mr Gardner said the slowdown resumes a gradual downward trend that started in summer last year but was briefly interrupted in April when growth accelerated.
He said: "Annual house price growth is now running at less than half the pace prevailing in mid-2014.
"Over the longer term we would expect house price growth to converge with earnings growth, which has typically been around 4% per annum.
"However, much will depend on supply side developments - in recent years the rate of building activity has remained well below that required to keep up with population growth."
Mortgage lenders have been offering some of their lowest ever rates in recent months and Bank of England figures released Tuesday showed the number of mortgage approvals made to home buyers increased to a 14-month high in April.