Cash buyers secure 9% discount on homes

The average price paid by cash buyers over the last year is £220,100 - 9% cheaper than the average price paid by buyers with a mortgage (£240,758), according to new research from estate agent comparison site, GetAgent.

Related topics:  Mortgages
Rozi Jones
19th February 2020
pound coins money scales balance house prices
"Cash is always king when it comes to pretty much any transaction and this doesn’t change just because you’re buying a house."

Falkirk is home to the best cash bargains in Britain with cash sales seeing a 24% discount compared to mortgage funded purchases. North Lanarkshire and Renfrewshire (-21%) are also home to some of the biggest differences, with Hartlepool seeing the biggest cash discount in England at (-21%).

Properties bought with cash go for 12% less in the North East and North West, while London is the only region where cash will cost you more - 6% more than the average price paid by a mortgage buyer.

In London, Sutton is the best borough for a cash buyer with an average price of £346,516 compared to £382,100 - a 9% reduction.

Redbridge, Enfield. Bexley and Harrow also rank high for cash discounts, while Merton is home to an average cash property price some 7% higher than the average mortgage purchase price, along with Westminster.

Founder and CEO of GetAgent, Colby Short, commented: “Cash is always king when it comes to pretty much any transaction and this doesn’t change just because you’re buying a house. In fact, it becomes even more pertinent.

"Cash buyers are preferable to many sellers because they provide a much simpler transaction with fewer hoops to jump through and often come without a complicated chain. The flip side of this convenience is that cash buyers have a far stronger position when it comes to negotiations and often sellers will accept a more sizeable reduction for the speed and convenience of a cash sale.
While this is nothing new, it has become more prevalent in recent times due to a few factors.

"Brexit uncertainty over the last year has left many on the fence and so those that are looking to sell have had to do so with a lower price expectation due to a dwindling level of buyer interest. Therefore, finding the golden ticket of a cash buyer with honest intentions in a market slowdown has prompted an even greater tendency to sell with a greater cash discount in order to get a sale over the line.

"At the other end of the transaction scale, the continued affordability of borrowing money due to low interest rates has seen many aspirational buyers commit to a greater sum than they may have otherwise.

"Of course, the cat and mouse game of a lower bid during the offer stage happens regardless of how a buyer may be funded, but with mortgage buyers already starting at a higher price point in terms of the sum they’ve been approved for, the final price paid has been greater than it may have been in different circumstances.”

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