What Does a Cash Buyer Actually Pay for a UK House?
The honest maths behind cash-buyer offers — how they arrive at 75–85% of market value, and why the true cost gap is smaller than it looks.
The short answer
Most reputable UK cash-buying companies pay between 75% and 85% of open-market value. Any firm that promises "100% of market value in 7 days" is either not really a cash buyer, or the number will be reduced sharply later in the process.
How a cash-buyer offer is built
A cash purchaser works backwards from what they can sell the property for after light refurbishment, minus their costs and required margin:
- Estimated resale price (comparables, PropertyData, sold prices on the same street)
- Less refurbishment budget (usually £8–25k for a typical terrace or semi)
- Less holding costs (council tax, insurance, utilities, finance) — typically 1–2% per month
- Less selling costs (agent fee 1%, legal fees, stamp duty on the original purchase)
- Less required margin (usually 12–18% net)
The number that falls out of that model is the offer.
Worked example: £220,000 mid-terrace
| Item | £ | | --- | --- | | Expected resale after refurb | 230,000 | | Refurb budget | -15,000 | | Holding + selling costs (6 months) | -9,000 | | Stamp duty on purchase | -6,000 | | Required margin (~15%) | -22,000 | | Cash offer | ~178,000 |
That's roughly 81% of the current £220k open-market value.
The true net comparison
An estate-agent sale looks better on the sticker but rarely nets what people expect:
| Line | Estate agent | Cash buyer | | --- | --- | --- | | Sale price | £220,000 | £178,000 | | Agent fee (1.2% + VAT) | -£3,168 | £0 | | 5 months council tax + bills | -£2,000 | £0 | | 5 months mortgage interest | -£3,000 | £0 | | Chain-collapse risk (~30%) | material | none | | Net in bank | £211,832 | £178,000 |
The real gap in this example is around £34,000, or ~15% — significant, but far less than the "you'll lose 25%" headline you may have read. For sellers on a deadline, that gap is the price of certainty.
When a cash buyer makes financial sense
- Empty probate property burning £600–£1,500/month in bills and council tax
- Repossession or serious arrears where every month adds interest and fees
- Non-standard construction (concrete, wimpey no-fines, timber-framed pre-1965) that most residential lenders will not touch
- Short-lease leaseholds (< 80 years) that trigger marriage value
- Serious structural issues, subsidence history, damp, Japanese knotweed
- Divorce settlements with a court deadline
Red flags that the "offer" isn't real
- The initial offer is close to full market value ("we'll pay £215,000 for your £220,000 house in 10 days") — this will be reduced after the survey
- No written offer within 48 hours
- Pressure to use a specific solicitor without offering a free choice
- Any request for upfront money
Frequently asked questions
Why don't cash buyers pay full market value?
They carry the refurbishment cost, holding costs, stamp duty and resale risk, and they need a margin. In exchange they remove chain risk and complete in weeks rather than months.
Can I negotiate a cash-buyer offer?
Yes. Get two or three written offers, share any recent valuations and comparables, and push back on the refurb figure if the property is already in good order.
Will the offer be reduced before completion?
With a regulated buyer, only if a specific issue is uncovered (survey, title defect, undisclosed charge). Blanket last-minute reductions are a warning sign — walk away.