The market share of buy-to-let properties bought with cash peaked at 62% in 2017, however the percentage has fallen each year consecutively.
According to Hamptons, as a consequence of the stamp duty holiday, the second half of 2020 saw the proportion of landlords using cash for purchases fell to 50%.
Over the course of 2020, cash landlords spent a total of £11.7bn on new buy-to-let purchases, £1.5bn less than in 2019.
Overall, first-time buyers bought £65bn worth of property last year.
The data shows that 65% of buy-to-let purchases in Wales were in cash.
The North West followed, at 64%, and the North East at 61%.
Overall, the proportion of landlord cash purchases fell in 10 out of 11 regions in Great Britain between 2019 and 2020.
Hamptons noted that the more expensive regions of the country were most likely to rely on mortgage finance, with 39% of London landlords purchasing in cash.
This data follows rent rises across Great Britain by 4.3% in January 2021, up from 4.1% in December.
The South East noted the greatest rise in rental prices on an annual basis, up 10%.
This marked the first time a region outside London recorded double-digit rental growth since Hamptons records began in 2012.
According to the data, the growth has been driven by declining numbers of rental homes on the market, with 14% fewer rental properties available year-on-year.
Rental growth in London remained positive for the fourth consecutive month, rising 1% compared to January 2020.
Despite this overall growth, inner London rents fell 15.9% year-on-year, whilst outer London rents rose by 6.2%.
Aneisha Beveridge, head of research at Hamptons, said: “While investor purchases remain low compared with pre-2016 levels, the stamp duty holiday has tempted more small and first-time landlords back into buy-to-let, reversing a shift towards portfolio investors.
“Most of these new entrants are relying on a mortgage to fund their purchase, despite the changes to mortgage interest tax relief eating into the profitability of the sector for some.
“Since 2016 the rental sector has been buffeted by tax and regulatory changes, resulting in 250,000 fewer rental homes in England since the sector’s peak in 2017.
“But record-low interest rates on cash in the bank combined with the lure of a stamp duty holiday has enticed a new generation of investor, many of whom had no previous landlord experience.
“Rental growth outside the capital continues to strengthen, running at a five-year high.
“A shortage of stock outside city centres has seen landlords push rents to above what they were achieving pre-COVID.
“In January more than two-thirds of landlords letting a home in Great Britain achieved a higher rent than they had previously let it for, and by an average of £60 per month.”
