Just 62% of properties are purchased from mortgages; a 5% drop since 2010.
Peter Williams, executive director for IMLA, said: “The shift towards cash and equity for property purchases may be less of a concern if you already have your foot in the door.
“But plenty more people are still shut out, even when their income and financial track record means they can sensibly manage a loan.”
He accounted the figures to foreign investors in London who pay in cash, while he added that for pockets of the UK cash buying is more common.
The report said big challenges the market faces are unwinding support measures such as Help to Buy and Quantitative Easing, tackling the ‘woefully inadequate’ level of housing supply and monitoring the effect of the Mortgage Market Review.
Williams added: “We are a long way from a normal mortgage market and must stay focused on improving access for responsible buyers who cannot hope to conjure up a vast sum of cash or equity.
“It is only recently that responsible borrowers have begun to enjoy a better chance of getting a mortgage.”
Mortgages accounted for the lowest value of property transactions since current records began, compared to 47% in 2010 and 45% in 2008.