Almost everyday new properties are being built up and down the country by large established property companies. They would not be building these unless there was demand for them. The builders have lot of investment tied in such building projects, and hence, they like to realise the returns from theses as fast as possible. They need to sell the properties to get back money locked in projects. To do, that, they offer incentives to public to buy the properties.
These are often in the form of:
- 10-18% discount in the market value, giving an immediate equity
- Deposit paid i.e. the buyer does not have to pay any down payment to own a property. A normal deposit of at least 5 % is required by lenders, subject to one's income.
- Stamp Duty paid. This is another expense associated with the property purchase, with a minimum of 1% of the house price.
- Fully Fitted Kitchen, bathroom,etc
So what else one needs?
Imagine a property offered at, say £200,000.
Normal purchase would require, the first time buyer to meet the following major costs:
- Initial deposit e.g. 5% = £10,000
- Property valuation (survey) fee, say £300
- Broker's fee, lenders arrangement fee, etc., say £2000
- Solicitor's fee, search fee etc., say £1700
- Stamp duty 1% = £2000
Total cost of owning a property = £16,000.
If you do not have that kind of money, then you cannot become a house owner, except as explained above.
Suppose you bought a new house from the property company, at 15% discount with deposit paid, then you have, not only become a property owner, you have taken a profitable leap into the future financially. How?
Look at the fortune you have amassed:
- Immediate Equity (15% discount in price) = £30,000
- First year rise in the price of the property, say 10 % = 20,000
So are financially well off by £50,000, without spending a penny of yours!
