Landlords expanding portfolios through cash purchases are securing discounts as high as £88,000 in cooling market conditions says a buying firm.
House Buyer Bureau analysed the average price being paid by a cash buyer across Britain since September last year and how this compares to their mortgage-backed counterparts.
The analysis shows that across Britain, the average cash buyer is now paying £278,910, some £29,235 less than those purchasing with a mortgage. The analysis also shows that this discount has increased by £1,624 when compared to the three months prior to last September’s mini budget.
It’s the North West that is currently home to the largest property price gap between cash and mortgage funded homebuyers, with cash buyers purchasing for almost £32,000 less.
In the South East, cash buyers are purchasing for just shy of £31,000 less than those with a mortgage, while the East of England (£29,217), Scotland (£25,487) and the North East (£23,598) are also home to some of the largest gaps.
London is currently the only region where cash buyers are paying more than their mortgage funded counterparts, £19,314 on average since September of last year to be exact. However, this overpayment by cash buyers has reduced by £4,010 when compared to the three months prior to the mini budget when they were paying £23,324 more than a mortgage funded homebuyer.
With the exception of London, all regions of Britain have seen the discount secured by cash buyers since the mini budget increase when compared to the three months prior to it, with the South West seeing the largest increase at £3,138.
The managing director of House Buyer Bureau, Chris Hodgkinson, comments: “Money talks and home sellers are always more inclined to listen to a cash buyer when it comes to negotiating on asking price, regardless of how the market is performing.
“This is down to the fact that they hold a far stronger position in the market and provide the option of a faster, more certain transaction timeline.
“Of course, opting for a mortgage-backed homebuyer may see you achieve a higher price, if you’re willing to take the additional time and risk.
However, since September last year, the market landscape has become increasingly more difficult and many of those who are reliant on a mortgage in order to buy have seen a squeeze on their purchasing potential.
“This has resulted in a higher degree of market turbulence and, with house prices starting to fall, many sellers are happy to take the hit with a cash buyer in order to secure a sale before the value of their home diminishes any further.”
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