The latest updated data from ONS has shown that the number of cash property sales across the UK has decreased by just over 19%.
According to the data, the largest falls were seen in the capital where 1,157 cash transactions occurred in December 2018, 29% lower than the previous 12 months.
This was followed by the North West which saw a 23% decrease (2,406 cash sales), the South East with a 22% decrease (2,834 cash sales), the South West and the East of England which both saw 20% decreases (2,557 and 1,919 cash sales respectively). The lowest drop was seen in Scotland where 2,283 properties were bought for cash in December 2018 (compared to 2,429 in the previous year, a 6% decrease).
Ruban Selvanayagam, Co-founder of Property Solvers said, “This evidence would suggest that it has become increasingly difficult to buy a property without accessing mortgage finance of some sort. These trends may well continue, especially in areas across London and the South East which have seen significant capital gains over the last decade.
“If you have a number of offers on the table, it can be a good idea to go for the buyer that will genuinely buy with cash. The typical bureaucracy particularly related to applying for a mortgage is effectively bypassed, and the transaction can pass through the conveyancing process much quicker than would normally be the case.”
However, he urges sellers to be cautious before agreeing to sell in this way, Selvanayagam said, “There are some unscrupulous buyers that will promise to pay with cash to secure a sale, only to then drop the price at the last minute (known as ‘gazundering’).”
For this reason, be sure to ask your solicitor to check the credentials and also whether they can present proof funds before the sale proceeds. An up-to-date bank statement or confirmatory letter from a Law Society-registered solicitor is usually sufficient.”