Although I'm no expert on mortgages and the property purchasing process when using one, I'm even less aware of how the process works when buying a property for cash. I will soon be in the fortunate position of having enough saved to purchase my first house outright, here in the UK.

Can someone who has done this provide a breakdown of how the process works? I imagine and hope it would be easier than using a mortgage; I can release the funds whenever necessary and buy any property I choose and can afford without lender restrictions. Of course a survey would still be required so I don't end up with a lemon plus a solicitor/conveyancer to ensure the paperwork all checks out, but what else should I be aware of?

Looking at this from the other side, during potential negotiations, is a cash buyer better for a seller than a mortgage user?

The other consideration I have is whether to go down this route at all, or instead put down a 50%+ deposit and keep a large chunk of liquidity. I appreciate this is more opinion- and circumstance-based than my main question, but thoughts are welcome.

  • Google there are loads of help available online. cash buyer is always preferred over a mortgage user. – DumbCoder Apr 5 '16 at 14:04
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    However, as a buyer, I'd much prefer a mortgage. My ten year rate of return on my investments is well above the 2.875% mortgage that I have. As well, at least here in the USA, the mortgage interest is tax deductible. – chili555 Apr 5 '16 at 14:26
  • Are you working with a realtor? Cash buyer should be much simpler and almost always preferred by a seller since there is no waiting for the lender. However, make sure you get all the inspections/title search and other details completed. This is what a realtor should coach you through. – jkuz Apr 5 '16 at 20:34
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    @jkuz: agreed - though in the UK, it would be your solicitor doing that kind of work, rather than a realtor/estate agent. The other big delay can be the other people in the chain, so a buyer with a mortgage, but who isn't selling, could be more attractive than one who is selling, but doesn't need a mortgage. – Steve Melnikoff Apr 5 '16 at 20:45

As average house prices continue to rise, almost 40% of homes in the UK are purchased with cash.

Stage 1 – Finding a property you can afford Stage 2 – Making an offer Stage 3 – Organise a solicitor and surveyor Stage 4 – Finalising the offer and mortgage (in your case, cash with proof of funds, balance due at closing) Stage 5 – Exchanging contracts Stage 6 – Completion and final steps

You don't need to prove where the money came from but, as you have said that you are a cash buyer, you do need to be able to prove that you have the cash to buy the house. So, assuming you have the money in an account with a bank or building society, you should be able to satisfy your solicitors by showing them a recent bank statement or passbook which clearly shows that you have whatever amount it is in cash.

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    Could you provide a source for the 40% statistic? – Steve Melnikoff Apr 6 '16 at 9:27
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    If the funds have been received into your bank account in the last 3 months, you will need to show where the funds have come from, especially if gifted from someone or inherited. This is part of standard Anti-Money Laundering practices required by law in the UK. I'm currently going through the process myself which is why I know. – toadflakz Apr 18 '16 at 15:19

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