This borrowing binge has boosted the mortgage vs cash house price gap in the North East by the most significant margin. The average property price funded by a mortgage is 15% higher than those funded by a cash sale, with the North West and Scotland also home to a double-digit difference (14%).
However, there is one region where mortgage buyers are securing a better price compared to cash buyers. The average property price for a mortgage-backed purchase in London is currently -5% lower than the average paid by cash buyers; £472,547 vs £499,468.
In a total of 13 boroughs, mortgage financed house prices are currently lower than those purchased with cash, with Westminster and Merton home to the biggest reduction (-6%), along with Newham (-5%), Islington (-4%), Southwark and Tower Hamlets (-2%).
Group CEO of Enness Global Mortgages, Islay Robinson, commented:
“Record low rates and the additional carrot of a stamp duty reprieve have caused buyer demand levels to increase at a rapid pace. With those securing a mortgage currently able to do so at such favourable rates, many are borrowing that little bit extra to either buy bigger or in a better area.
"The consequence of this is, of course, a higher price paid by mortgage-backed buyers and in any market conditions, paying with cash is always going to enable you to strike a better deal anyway.
"However, the higher price of buying in London means that current buyers are remaining realistic about what they can afford to borrow. With steeper price increases between locations and property sizes, this is curving mortgage funded price growth in several boroughs, with cash buyers actually paying more.”
