New data analysis released by MPowered Mortgages has revealed a continued growth in cash discounts, which has risen by 12.4% over the past two years.
Using data held in the Land Registry, MPowered found that between September 2022 and September 2024, cash buyers in Great Britain paid £28,189 less per property than buyers who used a mortgage, giving them a discount of 9.3%.
By region, the biggest discounts were enjoyed in the North West, where cash buyers typically pay £31,827 (13.4%) less than mortgage users. The average cash discount in Scotland stood at £26,476 (12.8%) and in North East England it is £22,122 (12.4%).
Bank of England data shows that by the end of October 2024, 68,300 mortgages were approved, a jump of 41.5% in a year and highest level since August 2022, just before Liz Truss’ mini budget.
Residential property transactions completed last October also increased by 10% from September – and 21% year-on-year – based on HMRC data.
London is the only place in Great Britain that did not allow cash buyers to enjoy lower prices. Cash buyers in September 2024 paid £15,344 per property than those with a mortgage. This is likely due to the high number of foreign property investors who tend to pay cash.
MPowered’s analysis also found that less than a fifth of homes are paid for in cash. June 2024 is the most recent month for which official data is available, which saw 22.4% of transactions completed by cash buyers. Across the same two year period of the analysis, this figure has fallen from its market share of 28.6% from September 2022.
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 finances 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.
“If you’re not fortunate enough to have the money to buy the home you want outright, you can give yourself almost the same leverage by having a fully underwritten mortgage offer.
“AI technology is dramatically shortening the time needed to secure a mortgage, and at MPowered we offer a lending decision within one working day to 96% of the completed mortgage applications we receive. Many customers report that this speed and certainty gives them a decisive advantage during the buying process, and leverage that was enjoyed only by cash buyers until now.”