Bond agreement gives first-time buyers 'time to save for deposit'

15-Jul-2008

English property developer the Cassidy Group has unveiled plans to make apartments available without the traditional cash deposit.

Instead, potential buyers of the firm's new homes will be asked for an Exchange Bond, an initiative also employed by developers Taylor Wimpey and Higgins Homes.

John Hannon, the development manager of Cassidy Group, explained that such a bond guarantees the full deposit amount to a seller if a buyer fails to complete a property purchase following an exchange of contracts.

"In the present economic climate, buyers are naturally more wary of parting with their money and the Exchange Bond is an effective tool for removing their concern," he observed.

Frank Speight, joint chief executive of bond developer Exchange Insurance Company, added: "Particularly with [a] new build property, it delays the need to liquidate existing assets for investors and allows time for first-time buyers to save for their deposit."

Taylor Wimpey recently offered first-time buyers an interest-free loan which amounted to up to a quarter of its properties' value.

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