Cash buyers wield a new level of power in the property market

A few miles inland from Cannes, on the French Riviera, the hilltop town of Mougins has become a popular spot for affluent Parisians and those from abroad seeking a home in which to enjoy the summer holiday season. But buying agent Tim Swannie recently negotiated €300,000 off the €2.9mn sale price of a home in the village on behalf of a client who was buying with cash. 

The seller had rejected a mortgaged offer of €2.8mn a few weeks earlier but had received no further offers, despite advertising the home extensively, and was getting worried, says Swannie. “By now, the home had been on the market for nearly five months, during which mortgage rates had increased: our client had cash and was keen to complete as soon as possible.”  

Without the delays and uncertainties associated with securing a mortgage, cash has long conferred an advantage to homebuyers across the world. But with today’s high mortgage rates increasing the chances a mortgage application will be rejected or that a prospective buyer will decide they can’t afford the monthly payments, cash has a new level of power.

In Manhattan, the number of cash purchases as a proportion of all transactions has set a new record in each of the last three quarters, and now stands at 65 per cent, according to estate agent Douglas Elliman. In France, mortgaged buyers have left the market in large numbers: the €1.05bn of new mortgages granted in June is less than a sixth of the €6.76bn of a year earlier, according to Banque de France. In the UK, property portal Zoopla predicts mortgage-backed sales will fall 28 per cent this year, with cash sales falling just 1 per cent.

“If we had a mortgage or a property to sell, we wouldn’t be at the table; instead, we are in front

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