Huge interest rate rises have given cash buyers an even bigger advantage over borrowers.
The share of cash buyers in the property market has risen to its highest level in eight years.
Almost 40pc of purchases have been completed using cash so far in January, the highest monthly share since December 2014, when 41pc of buyers were mortgage-free. In contrast, 29pc of sales were cash purchases during the month of January in 2021 and 2022, according to analysis by estate agency Hamptons.
Huge interest rate rises throughout last year have given cash buyers an even bigger advantage over those relying on a mortgage.
The average two-year fixed-rate mortgage has more than doubled since January 2022, rising from 2.38pc to 5.51pc this week, according to analyst Moneyfacts……
Cash buyers have the biggest sway in Wales, where more than half of purchases are made without a mortgage. More than 50pc of purchases in the country across the second half of October, whole of November and December and first half of January were completed using cash, compared with 46pc in the same three-month period in 2021.
Carol Peett, of West Wales Property Finders http://www.westwalespropertyfinders.co.uk, a buying agent, said many cash buyers in Wales were returning having lived in London or South East England, where house prices are higher, and a recent sale had given them enough equity to purchase without a mortgage.
Ms Peett said: “There is no doubt they have a huge advantage. Frankly for smallholdings or coastal properties there was very little hope of securing a property unless you were a cash buyer when the market was red hot last year”.
“Even now the market has slowed slightly for winter, the best properties still go to cash buyers. We can definitely secure a better price than those with mortgages as the sale is more likely to complete.”
“Cash gave buyers stronger bargaining power”, added Ms Peett, “and any buyers relying on a loan needed to have a mortgage agreed in principle to have a chance of competing”….
The Daily Telegraph – Tuesday, 24th January 2023 – https://www.telegraph.co.uk/property/uk/where-cash-buyers-snapping-discount-properties/
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