The Widening Mortgage vs Cash Price Gap – Group CEO Comments in Financial Reporter

Record-low interest rates have helped fuel a surge in buyer demand, with many purchasers taking advantage of favourable borrowing conditions to access larger mortgages than they may have in different market conditions.

As a result, the average price of mortgage-funded property sales is now 10% higher than properties purchased by cash buyers across Great Britain, according to Enness Global.

Robinson says that record-low mortgage rates, combined with the stamp duty holiday, encouraged more buyers into the market and gave those using finance the opportunity to borrow more in order to purchase larger homes or buy in more desirable locations.

He notes that this increased borrowing power contributed to higher prices being paid by mortgage-backed buyers, while cash purchasers often retain a stronger negotiating position and greater ability to secure a favourable deal.

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