The latest research by London lettings and estate agent, Benham and Reeves, has revealed where cash buyers are securing the biggest property price discounts across the prime London market when compared to those funding their purchase with a mortgage.
Benham and Reeves analysed market data across London’s most sought after postcodes amongst high-end homebuyers to see which was home to the biggest difference between the average cash house price and the average mortgage house price.
Across London’s prime postcodes, cash buyers are currently bagging themselves a saving just shy of £16,000 on average when compared to the price paid by mortgage funded buyers.
The biggest cash discount currently seen across the prime market is in the W1 postcode in Mayfair. Cash buyers are paying an average of £2.320m for property in the postcode, £81,772 less than their mortgage funded counterparts.
The WC2 postcode in Covent Garden is also gifting cash buyers a considerable saving in the current market, with a £54,826 difference between the average cash and mortgage house price.
NW8 in St John’s Wood ranks with the third highest cash property purchase discount with a £40,000 saving.
A further 24 prime London postcodes are seeing homebuyers secure a saving between £4,000 and £40,000 when compared to those buying with the aid of a mortgage.
The W4, N5 and SW19 postcodes are the only pockets of the prime London market where cash buyers are paying more than those buying with the help of a mortgage,
Director of Benham and Reeves, Marc von Grundherr said, “Cash is always king when it comes to negotiating a better price in the UK property market and this is no different at the very top end.
Regardless of the value of a property, a cash buyer often means a smoother, quicker and more stable selling process as there is no chain beyond them to complicate the transaction. This can be preferable for many sellers but it does often mean adjusting their price expectations for the pleasure.
As a result, cash buyers will often pay less and in the prime market, these discounts can be sizable although still relative to the overall price of a property.
We see many foreign buyers, in particular, benefit from a cash funded purchase as they generally tend to have a strong financial position and are entering the market fresh with no previous purchase slowing them up.
The London market currently provides a very attractive proposition, with a weaker pound and the additional benefit of a stamp duty discount meaning foreign cash buyers are saving themselves quite a considerable sum and are securing extremely good value for money.”
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