The ‘cash discount’ in Great Britain – the amount a seller is prepared to reduce the price of their house by – has risen by 12.4% in two years.
With the average seller in England and Wales having to wait 152 days between accepting an offer and completing their sale, cash buyers’ have a speed advantage that can give them the leverage to ask for, and pay, a lower price for a property.
Buyers in the north east were those who made the most saving, £31,827, by paying in cash while those using cash to buy a property in the capital, London, saved the least.
The average saving across Britain came in at £28,189, according to a mortgage specialist.
MPowered analysed official data and found cash buyers accounted for 22.4% of house purchases in July 2024 compared to 28.6% two years previously.
Stuart Cheetham, CEO of MPowered Mortgages, said two factors explained the power cash buyers have to pay less for the home they want – scarcity and speed.
He said: “As the property market heats up and interest rates fall, the number of househunters using a mortgage to fund their purchase is surging and cash buyers are becoming relatively rarer.
“Then there’s the trump card that cash buyers can play – speed. Rising demand is making a slow process take even longer, and the average seller in England and Wales now has to wait 152 days between accepting an offer and completing their sale.
“That’s why buyers who have their finance fully in place when making an offer are vastly more proceedable – i.e. attractive to sellers – than those who don’t. Sellers will often accept a lower offer in return for the extra certainty these buyers represent.”
Discounts available to cash buyers are rising as mortgage applications surge and cash purchasers become scarcer.
Bank of England data showed that 68,300 mortgages for a house purchase were approved in October 2024, up 41.5% in a year and the highest level since August 2022, the month before the mini-Budget.
Meanwhile HMRC figures show the number of residential property transactions completed last October jumped 10% compared to September, and by 21% compared to October 2023.
MPowered Mortgages, which claims to be Britain’s fastest mortgage lender, said the only place where cash buyers do not enjoy lower prices is London.
In September 2024, cash buyers in the capital paid £15,344 more per property than those using a mortgage, a reflection of the high numbers of foreign property investors – who invariably pay cash – buying homes there. London’s ‘cash premium’ of 3% has nearly halved since September 2022.
