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The Advantages of Buying a House with Cash in the UK

August 11, 2021

If you find yourself in a position to buy a house for cash you may be wondering if purchasing a house outright is a wise decision. 


It might seem sensible to minimize your debt by not taking out a mortgage and buying a house for cash in the UK if you can afford it, however, is buying a house with cash the best option?


Advantages of buying a house for cash


Choosing to buy or sell your house with cash has some distinct benefits for both parties which we explore below.


No mortgage issues 

As a cash buyer, you do not have to run the gauntlet of securing a mortgage on the house you want to buy. Even when buyers secure a ‘mortgage in principle’ from the lender, the lender can still decide to not lend the money prior to completing the sale. If the sale falls through it means the sellers will need to find another buyer for the property – starting the whole stressful and time-consuming process again.


Save money on interest payments

Even with today’s low interest rates, interest paid on mortgage loans adds up to a large sum of money. Buying a house for cash saves you this additional cost as well as any fees associated with the mortgage process.


Sellers love cash house buyers!

Buying a house for cash puts you in a great negotiating position! Not only are you more appealing to a seller than someone needing to secure a mortgage but you are more likely to get the property you want. Buying a house for cash is quicker, faster and more straightforward than someone requiring a mortgage and you are more likely to have an offer accepted at below the asking price.


Faster process

As a cash buyer has readily available funds there is no waiting period for securing a mortgage from the bank. Banks will often require mortgage lenders to carry out surveys and legal checks on the property which all take time. Buying with cash can reduce the process from months to weeks.


Fluctuations in the housing market will not affect you

House prices go up and down and many homeowners are left upside down on their mortgage payments, meaning they can owe more for their house than it is actually worth. It can be easier to weather these fluctuations when you own the house outright as they typically right themselves after a number of years.


No chain - the sale is less likely to fall through

When you sell to a cash house buyer you avoid the potential for a chain-breaking, as no chain is formed from the outset. Property sales often fall through because someone somewhere in a property chain changes their mind. It may be that the buyer has found a property they like more, or their personal circumstances and financial situations have changed. However, with a cash house buyer, no property chain is formed other than between the seller and buyer. With fewer people involved in the process, you are less likely to encounter problems ensuring that the sales go through successfully.


Disadvantages of buying a house with cash


It is worth considering the pitfalls of buying a house for cash in the UK and these are:


Loss of liquidity

Do a proper budget of your living costs and check that you have enough income coming to cover the cost of running a house, such as a day to day living costs and bills. It is also worth putting some money to one side for a ‘rainy day’ for those unexpected costs that might arise.


Lack of flexibility

Putting all your cash into one big-ticket item, like a house, may not be the best idea. Particularly if in the future you want to sell the house and buy another property as you may not have enough money to put down as a deposit on your new home.


What does ‘Cash Buyers Only’ mean?


Estate agents sometimes advertise properties as ‘cash only buyers’, which means they only want buyers who do not require a mortgage in order to complete the sale. 


There are a number of reasons as to why this might be, however a lot of the time it is because the property is unmortgageable, leaving it only available to cash buyers. 


This may be because there are structural problems with the property or that it is located in a high risk of flooding. The key thing to do is to talk to the agent/seller about why they are asking for cash only. It is definitely worth getting a survey carried out on the property to ensure that there are no hidden surprises. 


You still might decide to go ahead with buying the property even if the survey shows problems as it will all depend on the size of the problems and how much they will cost to resolve. As the saying goes “it is better to be forewarned and forearmed”!


It could still fall through!


Even though as a cash house buyer and you don’t need to secure a mortgage to buy a property it can still fall through. 


Sellers can change their minds. 


This is why it might be an idea to explore Halo House Buyers as an option if you are looking to sell your home to a cash buyer. They will always follow through on the purchase and never change their mind, even if there are issues with the property.


Get in touch with Halo House Buyers today, and sell your house fast for cash!

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