Homebuyers have to provide deposits months ahead of completion leaving them strapped for cash during the home buying process, according to Deposit Doctor, which has just launched its new product to help homebuyers access the housing market.
The Deposit Doctor Bond acts as a substitute for the cash deposit for the period between signing the sale contract and completion enabling helping buyers to free up their cash.
In today’s property market, saving for a deposit represents a significant challenge, especially for first time buyers. Recent figures by the ONS* found the average deposit needed currently stands at £29,451 (an increase of 14.7%, or £3,766) on an annual basis.
Buying off-plan requires a significant outlay of capital, with the prospect of completion often a long way off. These issues also often impact upon those looking to downsize or move to a retirement property. Additionally, for potential buyers involved in a long or complex chain, providing the full deposit can prove a stumbling block that causes the chain to collapse.
Simon Heilpern (left), Co-Founder, Deposit Doctor, said, “There can be no doubt that the Brexit decision will have an impact on the housing market with home buyers likely to be even more nervous about the financial commitment being made and need to allow for a range of costs from deposit, mortgage fees, stamp duty to survey and legal fees. Buying a home is no easy task and those in a position to buy a property will want the process to be as quick and pain free as possible. The Deposit Doctor Bond means both buyers and sellers can move along the property ladder in a quick and smooth manner. It effectively frees up cash flow, benefiting consumers by providing peace of mind while supporting the market by returning liquidity.”
A Deposit Doctor Bond can be used for all or part of the deposit required, available online for up to 20% of the purchase price (up to £2,000,000). Bonds will be offered for terms of up to 2 years at an affordable premium of 3% to 3.5% per annum, and more bespoke services are available on request.