Cash and needs-based buyers driving prime markets

Cash purchasers, younger needs-based buyers and relocators are the driving force behind the current prime UK property market, according to research from Savills.

Analysis of prospective buyers and sellers of prime property by the agency brand reveals that commitment to move remains higher than at the back end of 2022, with a net balance of +24% looking to move in the next year compared with+7% in August 2022 and +21% in November 2022.

However, overall sentiment to move has fallen from the levels of +32% in April of this year, attributed to renewed concern over rising interest rates and the wider economic outlook.

There is also a clear distinction between cash and mortgage buyer motivations, according to Savills, with the short-term three to six month sentiment of those looking to take on more than 50% debt falling by a net -5% since April 2023 compared with +16% of cash buyers looking to move in this period.

In terms of budgets, the majority of respondents say that they are keeping their budget and source of funding the same, however, 22% say that they have decreased their budget in light of rising interest rates and the increased cost of living.

There is still a notable split between cash and mortgaged buyers. Almost three quarters of cash buyers have kept their budgets the same whilst almost 60% of those using more than 50% debt have reduced their budgets.

The Bank of Mum & Dad still appears to be open. When asked if recent changes to the economic backdrop have made them more inclined to help family members out financially, a net balance of +22% agreed.

While two in five plan to use the equity released from a property sale, the majority (58%) plan to use “other funds” for this support.

The vast majority (62%) specifically plan to help those who are getting onto the housing ladder for the first time.

Frances McDonald, director of research at Savills, said: “Buyer and seller sentiment remains more positive than at the back end of last year when confidence took a significant dip.

“The bulk of this desire to move – especially in the short term – is coming from those aged 40 and below, who are most likely to be needs-based buyers looking to relocate for work, or looking to rightsize their home to better suit an expanding family.”