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Revealed: The house price discounts desperate sellers are offering cash buyers

house and cash
house and cash

Cash buyers are paying £22,800 less for properties than those buying with a mortgage, new figures show.

Buying in cash saves 8pc compared with using a mortgage, according to Jackson-Stops estate agents.

Cash buyers paid £260,401 on average last September, while buyers with mortgages paid £283,159.

Nick Leeming, chairman of Jackson-Stops, said cash buyers are getting discounts amid volatile mortgage rates because they can offer “speed and certainty”.

He said: “Buyers without a mortgage are in the most advantageous position in today’s market.”

Sellers are increasingly favouring cash buyers because the likelihood of chains collapsing is smaller than with mortgaged buyers who have had to pull out of sales because of rising mortgage rates.

Cash buyers are saving the most money - £32,832 - in the South East, the analysis found.

The average cash buyer spent £381,324 in the region, compared with £414,156 among those with mortgages.

This was followed by the North West, where cash buyers paid £31,962 less on average. Mortgaged buyers paid £229,974 for their homes, while cash buyers spent £198,012.

Another area where cash buyers had a big advantage was in the East, where cash buyers got a discount of £29,910.

The average price paid by cash buyers was £342,014, compared with £371,924 for mortgaged buyers.

Mr Leeming said a large proportion of cash buyers are baby boomers who have paid off their mortgages and are deciding that now is the time to downsize and live retirement with fewer bills.

Because of how long it is taking to complete property sales, they have a significant advantage by not requiring a lender, which slows down the process. The length of time it takes to complete a property sale reached a record high of 135 days in 2022, according to the Landmark Information Group, a property data company.

Cash buyers had the smallest advantage in the South West, where they paid only £10,440 less than those with mortgages, or 3pc.

Intense competition for properties in the South West last year left little room for buyers to make significant savings by paying in cash.

Brian Bishop, director of Jackson-Stops in Taunton, said: “A large proportion of our buyer pool are mortgage free having built up equity in more saturated markets, making their appeal less of a differentiator when making an offer.

“They would have been competing with three or four other cash buyers in the same boat, where the winning, highest, bid is the only real differential.”

London was excluded from the analysis because it has a high proportion of cash buyers that would skew the data, according to Jackson-Stops.