Cash buyers secure better deals than mortgage buyers

Latest figures reveal that cash property buyers have a 9% edge over mortgage buyers. But in some parts of the country cash buyers can push house prices upwards

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Among all the different techniques for negotiating the best price on a property, buying in cash gives you the ultimate edge. So much so that recent research by One77 Mortgages reveals that cash buyers across the UK can expect to buy a property for a substantial average of nine per cent less than the total borrowed for a mortgage on the same property. 

These figures vary between different locations, with the highest disparity between cash buyers and mortgage of twenty-three per cent recorded in Falkirk in Scotalnd. In England, cash buyers can expect to save twenty five percent on a house price in Hartlepool. 

London, on the other hand, is among the few places in the UK where cash buyers will find themselves at a financial disadvantage, paying as much as 10 per cent more than mortgaged buyers. The reason behind this paradox? Luxurious properties in prime London postcodes in areas such as Westminster and Chelsea (and many properties in less luxurious London areas, too) tend to attract multiple cash buyers who generate a bidding war on the house, typically offering more than the asking price. There are also cases where properties are un-mortgageable due to unusual geographical locations that lenders won't cover, such as the more remote places in the Scottish Highlands.

Managing Director of One77 Mortgages, Alastair McKee, comments, '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.'

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