Cash purchases are taking up an increasing proportion of the value of housing transactions, widening the gap between the “haves” and “have nots”, lenders have warned.

Figures from the Council of Mortgage Lenders (CML) show that cash buyers make up around a third of transactions, but trade body the Intermediary Mortgage Lenders Association (IMLA) has analysed Land Registry data on how much outright cash is going towards purchases and found that of the £261bn of residential transactions last year, £109bn was in cash.

The amount was up 5% on 2015 and 32% on 2013 and means cash made up 41.8% of funds for residential purchases in 2016, or £418 in every £1,000.

This is the highest contribution of the post-credit crunch years, reducing the role of mortgages in funding house purchases even though total lending grew each year from 2013 to 2016.

In comparison, cash made up 37.7% of the value of transactions or £377 in every £1,000 in 2013.

Peter Williams, executive director of IMLA, warned this could have negative implications for aspiring home owners and home movers who cannot stump up enough funds to add to a mortgage which their salary can support in order to afford a property purchase.

He said: “With the mortgage market having cooled and interest rate expectations shifted since then, there is a legitimate case for asking whether current restrictions on lending are still appropriate or have become over-zealous.

“In the meantime, rising house prices and stagnant incomes mean that access to wealth as well as mortgage finance will increasingly separate the ‘haves’ from the ‘have nots’ in the property market if the importance of cash continues to grow.

“The recent Housing White Paper was a missed opportunity to take strong action on housing supply, and we must hope that the upcoming election manifestos will be used as an opportunity to put that right.

“For all the focus on the UK’s international standing, Brexit mustn’t blind the next Government from problems brewing on its own doorstep which will drive an increasingly bigger wedge between different elements of society and block those without family financiers from having access to home ownership.”