NEWS
UK developer offers property investors 10 day cooling off on investments
04-10-2012
 |
Salford based affordable property developer FreshStart Living said it believes it is the first scheme of its kind in the property investment market.
The company, which sells the majority of its properties to institutions and buy to let investors, will now allow clients to reserve a property without paying a reservation fee; they will then have ten days cooling period to decide if they want to exchange.
It describes itself as a pioneer when it comes to self regulation in the property investment industry and has implemented the new purchase process after receiving feedback in a recent client survey.
As it stands, companies selling ISAs, investment funds, policies and other structured investment and savings products must provide investors with chance to change their mind. FreshStart Living believes that this will eventually be implemented on the property investment industry and this move will help the company stay ahead of the curve.
Currently when purchasing a FreshStart Living property, investors pay a non refundable £3,000 reservation fee and then contracts are issued to their nominated solicitor. Upon receipt of the contracts the investor has 14 days to exchange contracts, they are then legally bound to continue with the purchase of the property.
If after 14 days they fail to exchange their property is remarketed and FreshStart Living retains the original reservation fee.
In the new system FreshStart Living will now issue cool off contracts which will allow clients to reserve a property without paying the usual £3,000 reservation fee. The clients will then have a 10 day cooling off period to either exchange or walk away from the transaction.
At the end of 10 days they can exchange contracts or, if they decide not to continue with the purchase, they can walk away without losing any reservation fee.
‘We want our investors to be confident about their property investment and the high returns that they can achieve, this way investors can be sure they are fully committed to the purchase before having to show full financial commitment,’ said Charlie Cunningham, chief executive officer of FreshStart Living.
‘The new cooling off period will allow investors ten days to really think about their investment then if they decide to walk away they won’t face any financial penalty. We believe this process to be the first of its kind in the property investment industry, it is revolutionary,’ he explained.
He pointed out that currently direct property investment isn’t regulated by the UK’s Financial Services Authority but he believes that in the near future this sort of thing will become industry standard.
