Cash buyers pay £28,000 less on average for a home than those relying on a mortgage, new figures show.
Fresh analysis by MPowered Mortgages shows the ‘cash discount’ in Great Britain has risen by 12.4% in two years.
Cash buyers now account for less than a quarter – 22.4% – of transactions, down from 28.6% two years ago, and are commanding discounts of 13.4% in North West England and 12.8% in Scotland.
With the average seller in England and Wales having to wait 152 days between accepting an offer and completing their sale, cash buyers’ speed advantage gives them the leverage to ask for, and pay, a lower price
The research by MPowered Mortgages, Britain’s fastest mortgage lender, found the only place where cash buyers don’t 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.
MPowered’s analysis also found that cash buyers now account for barely a fifth of home purchases in Britain. In July 2024, the most recent month for which official data is available, 22.4% of completed transactions were made by cash buyers. By contrast, in September 2022 their share of the market stood at 28.6%.
Stuart Cheetham, CEO of MPowered Mortgages, commented: “Two factors explain the power cash buyers have to pay less for the home they want – scarcity and speed.
“As the property market heats up and interest rates fall, the number of house hunters 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.
Although cash remains king when it comes to buying property, Cheetham reports that AI technology is dramatically shortening the time needed to secure a mortgage.
“Many customers report that this speed and certainty gives them a decisive advantage during the buying process, and leverage that was until now enjoyed only by cash buyers,” he added.