Dragons' Den Caan backs agency cash cow
Dragons' Den star James Caan is fronting a new campaign that offers agents a £500 referral fee to help kickstart the housing market.
The campaign is being launched today to promote Homebuyer Finance, an interest-free unsecured loan designed to help cover all sale-related fees, including Stamp Duty and conveyancing. The millionaire entrepreneur is launching the product in his role of chairman of property portal Look4AProperty.com in which he bought a 25% stake last year.
The money division of the portal, Look4AProperty|Money, has secured £1bn worth of funding from Hitachi Capital to offer the loans for up to 36 months. Buyers can borrow a further 3% of the cost of their fees to cover unforeseen disbursements relating to their purchase. A 10-month loan to cover the cost of a Home Information Pack is also available. The minimum loan amount is £500; there is no maximum.
Buyers can apply for the loan through an agent who is registered to market the scheme. Agents will be paid £500 for each client referral.
Speaking to The Negotiator, Caan (pictured), says: "The proposition is very compelling. Kickstarting the housing market and making it easier for the consumer to get on the ladder of property is what it's all about. If you're buying a £300,000 property, the Stamp Duty is not insignificant, but it's not just about the fees.
"The market has changed dramatically in terms of the deposit you need today versus what you may have needed a couple of years ago. In that environment, a few thousand pounds today is a material sum. First and second-time buyers don't have that level of liquidity; whatever cash they have, they need for the deposit, so I think this product can make a big difference."
The portal is limiting scheme membership to two agents per town on a first-come-first-served basis. To sign up, agents need to subscribe to Look4AProperty.com, which is free for the first three months and £200 per month thereafter. One month's notice is required by agents wishing to terminate their subscription and there is no exit fee for doing so.
Berkshire-based Prospect, which has six branches, is one of the agencies to have already signed up to market the scheme, and talks are understood to be underway with Connells Group and Countrywide. Aaron Turner, group chief executive officer of the portal, claims that the agency that piloted the scheme last year increased its instructions by 30%.
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