Recent research by Apex Bridging, a property finance specialist, has uncovered that cash buyers in the UK property market stand to save an average of £77,000 compared to those purchasing with a mortgage. This revelation comes as recent Bank of England data shows a rise in mortgage approvals, indicating a resurgence in homebuyer activity after a lull due to high mortgage rates. Consecutive months of house price growth reported by Nationwide and Halifax further underscore this trend.
Apex Bridging’s analysis, comparing average asking prices for cash-only listings to the overall market, highlights significant opportunities for cash buyers. The average asking price for current market listings in Great Britain stands at £255,588, but for cash-only listings, the average price drops to £178,366, marking a saving of £77,222, or 30.2%.
The greatest percentage savings are seen in London, where cash buyers enjoy a 32.6% discount, translating to a substantial £159,317 saving due to the capital’s expensive market. Regions like Wales, the East of England, East Midlands, and the South East also offer above-average savings for cash buyers.
Despite the potential benefits, the availability of cash-only listings remains a question. Across Britain, there are currently 4,924 cash-only listings, with the South East holding the largest share at 27.3%. Conversely, Scotland and the North East offer the fewest opportunities, with just 0.7% and 1.6% of the national total, respectively.
Chris Hodgkinson, Managing Director of Apex Bridging, explains the rationale behind cash-only sales: “Sellers will often request a cash buyer because it tends to lead to a faster transaction… For the privilege of speed, these sellers are willing to accept less money for their property. As our data shows, they tend to be willing to reduce the price by 30%.”
He notes that cash purchases are particularly relevant for properties with significant issues like fire damage or structural problems. However, Hodgkinson acknowledges the limitations of cash purchases, particularly regarding renovation budgets, suggesting bridging loans as a solution for the shortfall.
In a message to prospective homebuyers, Hodgkinson advises: “House prices are on their way up… Therefore, you’re advised to act now because if you can get a deal agreed before Christmas, you could be enjoying a very happy new year indeed with double savings – the first from pouncing on lower prices, the second from your cash buyer discount.”