Vendors will often accept an all-cash purchase offer over a higher-priced offer with a mortgage, highlighting the importance of cash in powering the market for property.
With stretched affordability and historically low mortgage borrowing rates, it is unsurprising that mortgage sales volumes across the nation are 138% higher than cash sales volumes. But fresh research shows that buyers who do not take out a mortgage when purchasing property can typically expect to pay 9% less on average, suggesting that cash remains king in the buy-to-let market.
House price data and sales volumes sourced from Land Registry Mortgage/Cash data reveals that across Great Britain, cash-based buyers pay less than those acquiring property with a mortgage, with the exception of London.
The capital is the only region where cash property prices are higher than mortgage property prices.
By region, the gap is highest in the North East where mortgage funded house prices are 14% higher than those purchased with cash.
Region |
Difference of Average Mortgage House Price to Cash House Price |
% of Mortgage Sales Volumes Over Cash |
North East |
14%
|
111%
|
North West |
13%
|
121%
|
Scotland |
12%
|
124%
|
West Midlands |
10%
|
205%
|
East of England |
8%
|
160%
|
South East |
7%
|
155%
|
Yorkshire and the Humber |
6%
|
128%
|
East Midlands |
5%
|
147%
|
Wales |
4%
|
91%
|
South West |
2%
|
76%
|
London |
-7%
|
281%
|
England |
9%
|
143%
|
Great Britain |
9%
|
138%
|
Buy-to-let landlords purchasing property in Falkirk can typically expect to make the biggest savings, with mortgage buyers paying 32% more on average than cash buyers.
North Lanarkshire (26%) and Renfrewshire (25%) are also amongst the highest.
Hartlepool is the largest gap in England at 25%, East Renfrewshire, East Dunbartonshire, Preston, Middlesbrough, Burnley and St Helens also make the top 10.
Although placing 18th in Great Britain, Newport is home to the highest Welsh gap in mortgage and cash buyer house prices at 16%.
Although only the 83rd largest gap overall, Sutton is home to London’s largest gap with mortgaged fuelled house prices sitting 10% higher than those purchased with cash in the borough.
Highest Gaps in Great Britain
|
Region |
Difference of Average Mortgage House Price to Cash House Price |
% of Mortgage Sales Volumes Over Cash |
Falkirk |
32%
|
190%
|
North Lanarkshire |
26%
|
255%
|
Renfrewshire |
25%
|
190%
|
Hartlepool |
25%
|
83%
|
East Renfrewshire |
24%
|
130%
|
East Dunbartonshire |
23%
|
158%
|
Preston |
21%
|
143%
|
Middlesbrough |
20%
|
149%
|
Burnley |
20%
|
22%
|
St Helens |
19%
|
193%
|
|
|
|
|
|
|
|
Alastair McKee, managing director of One77 Mortgages, said: “Many home sellers will be drawn to a cash buyer as it can often mean a quicker, smoother selling process with less paperwork and no onward chain, which can be hugely appealing to someone that needs a quick sale in particular.
“However, savvy buyers will know that they are in this stronger position and as a result they will often negotiate more off the asking price than they otherwise would, with the seller tending to accept it, resulting in a lower sold price achieved. I myself sold my last property at £100,000 below asking price to a cash buyer due to the greater convenience of doing so as I was lucky enough to be in a strong position due to my onward purchase, so I can certainly understand the appeal.
“When considering which works best for you it’s really down to priorities. If you need to sell quickly then a cash buyer is the way to go, but if the sold price is more important, it’s worth holding out for an offer at full asking price.”
Highest Gaps in England
|
Region |
Difference of Average Mortgage House Price to Cash House Price |
% of Mortgage Sales Volumes Over Cash |
Hartlepool |
25%
|
83%
|
Preston |
21%
|
143%
|
Middlesbrough |
20%
|
149%
|
Burnley |
20%
|
22%
|
St Helens |
19%
|
193%
|
Warrington |
17%
|
182%
|
Solihull |
16%
|
182%
|
Warwick |
16%
|
208%
|
South Tyneside |
16%
|
157%
|
Darlington |
15%
|
152%
|
|
|
|
Highest Gaps in Wales
|
Region |
Difference of Average Mortgage House Price to Cash House Price |
% of Mortgage Sales Volumes Over Cash |
Newport |
16%
|
268%
|
Rhondda Cynon Taf |
14%
|
114%
|
Neath Port Talbot |
10%
|
119%
|
Caerphilly |
9%
|
212%
|
Bridgend |
9%
|
188%
|
Blaenau Gwent |
9%
|
67%
|
Swansea |
8%
|
90%
|
Merthyr Tydfil |
7%
|
127%
|
Vale of Glamorgan |
7%
|
138%
|
Monmouthshire |
7%
|
66%
|
|
|
|
Highest Gaps in Scotland
|
Region |
Difference of Average Mortgage House Price to Cash House Price |
% of Mortgage Sales Volumes Over Cash |
Falkirk |
32%
|
190%
|
North Lanarkshire |
26%
|
255%
|
Renfrewshire |
25%
|
190%
|
East Renfrewshire |
24%
|
130%
|
East Dunbartonshire |
23%
|
158%
|
South Lanarkshire |
17%
|
170%
|
City of Dundee |
17%
|
139%
|
East Ayrshire |
16%
|
94%
|
City of Glasgow |
16%
|
150%
|
North Ayrshire |
15%
|
29%
|
|
|
|
Highest Gaps in London
|
Region |
Difference of Average Mortgage House Price to Cash House Price |
% of Mortgage Sales Volumes Over Cash |
Sutton |
10%
|
454%
|
Redbridge |
7%
|
430%
|
Enfield |
6%
|
362%
|
Bexley |
6%
|
421%
|
Harrow |
5%
|
338%
|
Greenwich |
4%
|
464%
|
Hillingdon |
4%
|
443%
|
Kingston upon Thames |
4%
|
407%
|
Havering |
3%
|
397%
|
Bromley |
3%
|
310%
|
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When you say “all cash” presumably the article means nothing to sell? No solicitor is going to accept “cash” Trying to settle a discussion.
Cash is king, few yrs ago I purchased a house from Barrett that they had taken in part x, I bypassed the estate agents and made a cash offer 20% below the asking price by email direct to Barrett, and completed 2 wks later, bid low they can only say no, and sometimes they say yes.
I get offered cash on some of my flat sales, if on market for £250k say for Cash, ie no mortgage to go through and exchange and completion can be done in say 4 was max then £250k could become £240k -£245k.
A lot of cash sales are for properties which wouldn't get a mortgage and are heavily discounted, so skewing the statistics. It's a bit like highlighting the fact that more than half of all workers earn under the average wage, because some earn so much more thus skewing the figures.
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