Property Investment Company Announce 10 Day ‘Cool Off Period’ In The Investment Process To Stay Ahead Of FSA Curve
Affordable property developer FreshStart Living will offer investors a chance to walk away from their property purchase without facing a financial penalty.
Affordable property developer FreshStart Living has announced a ten day cooling off period during the purchasing process, the first scheme of its kind in the property investment market.
The Salford-based developer 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.
FreshStart Living is 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 the 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 pay £15,000 to exchange contracts, they are then legally bound to continue with the purchase of the property.
If after 14 days they fail to pay the £15,000 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.
If at the end of the ten days they want to exchange contracts, they will pay £15,000 and the investment property will legally be theirs. If they decide not to continue with the purchase, they can walk away without losing any reservation fee.
Charlie Cunningham, CEO of FreshStart Living said:
“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.
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. At the minute direct property investment isn’t regulated by the FSA but in the near future this sort of thing will become industry standard, we want to stay ahead of the curve.”
