Investors in on- and offshore property are now able to replace cash deposits with an exchange bond, through the London-based Exchange Insurance Company.
ExCo says its exchange bond can be purchased by buyers of new and off-plan properties who in many cases wait for extended periods before the property is completed.
The bond acts as a financial guarantee provided by ExCo to a seller on behalf of the buyer and instead of handing over cash on exchange and then waiting for completion, the buyer pays the agreed purchase price in full on completion.
The exchange bond and the overseas exchange bond is available at a premium to investors in the UK and Ireland and the financial guarantee is issued for a period of between three months and five years.
ExCo says it has agreements with leading developers including Taylor Wimpey, David Wilson Homes and Higgins Homes and adds that many developers will offer to refund the initial premium paid for the exchange bond on completion as an incentive.
ExCo sales and marketing director Frank Speight says: “The exchange bond is a very attractive alternative to making a cash payment on exchange when buying a property. This is particularly true for first time buyers who may well be able to afford the repayments on a mortgage, but simply can’t find a large lump sum for a cash deposit to secure their chosen property. The exchange bond can make the difference between securing or losing a potential new home.”