A new study has found that cash buyers are paying an average of £27,600 less than mortgage holders for properties in South London.
The study, by specialist property lending platform Octane Capital, compared transactions and prices in the mortgage and cash buyer markets between December 2021 and April 2023.
It found that the gap between cash and mortgage prices has widened in recent months, as the cost of living crisis has made it more difficult for people to get a mortgage.
In the South West, cash buyers accounted for 38% of transactions during the study period, compared to 22% in London.
This suggests that there is more competition from cash buyers in the South West, which is driving down prices.
Octane chief executive Jonathan Samuels said: "It's always been easier to buy with cash than spend time arranging a mortgage, but in the current environment it seems that advantage is bigger than ever, with cash buyers saving £27,600 compared to their mortgage counterparts.
"Mortgaged buyers are subject to more processes and delays, making it hard to compete with those who can swoop in with an immediate lump sum of cash.
"It's also far tougher to qualify for a loan than in late 2021, as surging interest rates make it harder from an affordability perspective, so buying with a mortgage is not an easy task.
"If you are able to qualify for a mortgage, our data suggests you should get your finance arranged as quickly as possible to ensure you can seal the deal, even if you have competition from a cash buyer.
"In some regions, like the South West, that competition is particularly fierce, so you have to be ready to hand over the money."
The study also found that the gap between cash and mortgage prices is widening in every region of Great Britain, with the exception of London.
This suggests that the trend of cash buyers paying less than mortgage holders is likely to continue in the coming months.
If you are a homebuyer in South London, it is important to be aware of the competitive landscape and to make sure you are prepared to act quickly if you find a property you want to buy.
Here are some tips for homebuyers in South London:
- Get your finances in order as early as possible. This will make it easier to get a mortgage and to compete with cash buyers.
- Be prepared to act quickly. If you find a property you want to buy, be prepared to put in an offer as soon as possible.
- Be realistic about your budget. The competition from cash buyers is likely to drive up prices, so you need to be realistic about what you can afford.
- Don't be afraid to negotiate. If you find a property you love but it is out of your price range, don't be afraid to negotiate with the seller.