Tue 14 Jun 2022
Paul Bennett, Director
While it isn’t the preserve of the property majority, buying a residence using cash is one of the most attractive transactional options available. The Behr & Butchoff estate agent team assists cash buyers in London on a regular basis, with properties for sale in and around St. John’s Wood frequently changing hands without the need for a mortgage.
Almost a fifth of London homes bought for cash
It was, therefore, good to have London’s cash buying activity quantified. New research by mortgage broker Henry Dannell found that over the last 12 months, cash buyers accounted for 18% of all property transactions in the capital city. Together, cash sales amounted to a value just short of £10 billion.
While this sounds a vast sum, it accounted for just a fifth of the total value of homes sold across London during this time. Although the proportion of cash-based transactions remains relatively modest, the average price paid in cash has risen by 3.7% in the last 12 months
Westminster bucks a trend
While buying with cash remains a niche activity, the action is having an impact on the London market, especially in Behr & Butchoff’s neighbourhoods. The Henry Dannell team noted that most buyers were paying more for properties when using a mortgage than they did when purchasing a property using cash in all but three of London’s boroughs.
In our very own Westminster, the trend has been bucked. Cash buyers in our borough are now paying almost £64,000 more for a dwelling, equivalent to a 7% price premium versus homes purchased in the same area by those using a mortgage.
The advantages of cash
When a purchaser presents themselves as a cash buyer, they won’t need a mortgage to finance the property. This reduces risks associated with a sale aborting, such as the lender refusing to loan the money (this can happen even if a mortgage agreement in principle was issued) and a lender’s surveyor down-valuing the property.
Removing the mortgage application and approvals process also makes the conveyancing process quicker as cash can be released almost immediately, while mortgage can take weeks to come to fruition.
A cash buyer will also be the bottom of the chain and therefore isn’t at the mercy of having to find a buyer for a property they are selling in order to make an onward purchase. Generally, the shorter the chain, the more reliable and faster the transaction will be.
Although these advantages are not to be ignored, St. John’s Wood estate agent Behr & Butchoff works with extreme due diligence to protect both the buyer and the seller. Background, ID and AML (anti money laundering) checks will be thorough, the conveyancing will be identical to that performed when a mortgage is used and a survey is highly recommended by the Behr & Butchoff team.
If you are looking to buy or sell property in the St. John’s Wood area – or would like advice about the current property market – contact Behr & Butchoff today.