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http://www.thisismoney.co.uk/mortgages-and..._id=80&ct=5

Dragon offers 0% stamp duty loan

Simon Lambert, This is Money

17 September 2009

Dragons Den star James Caan is offering interest-free stamp duty loans of up to £50,000 to homebuyers using website Look4aProperty.com.

In a bold move that could have come straight from the popular business TV show, the entrepreneur, who part owns the property listing website, says he wants to help kickstart the property market.

Undoubtedly, he is also looking to garner extra publicity and grab extra customers for Look4aProperty, which is a relatively small player in the extremely competitive property listing game.

Caan's challenge to the big boys such as RightMove, FindaProperty and PropertyFinder is backed by a £1bn pot and loans can be taken out for a two to three-year term, to be paid back monthly with no interest charged.

He claims that by providing much needed breathing space for buyers facing lenders' demands for bigger deposits, it will encourage more people into the property market.

Loans will only be offered to those buying a property from an estate agent advertising through Look4aProperty and can also cover solicitors' fees.

Caan said: 'This scheme gets rid of those financial obstacles which are holding up the housing market. This means that thousands of people who have been putting off moving or buying their first home can now climb up the property ladder without further delays.'

The motive behind the headline-grabbing move will be to increase the profile of the website and also pull in more customers and advertisers. This comes at a time when the traditional model of property listings as used by RightMove is being challenged by newcomers such as GloBrix and Zoopla.

Caan, one of the panellists on BBC's Dragon's Den, where entrepreneurs pitch their ideas and firms to business investors, owns 25% of the property listing website and is its chairman

To that extent, all estate agents offering the interest-free stamp duty loans must be a licensed Look4aProperty agent and will also get £500 commission for each loan they introduce. The fund is backed by business and retail finance group Hitachi Capital.

The smallest loans on offer are £500, which is below the 1% limit of stamp duty currently at £175,000, while the largest sum that can be borrowed is £50,000, equivalent to the 4% stamp duty on a £2m home.

The amount people can borrow will be set by the stamp duty level on the property they are buying, plus solicitors' fees.

While house prices are down 20% on their August 2007 peak, according to Halifax figures, lenders are demanding deposits of at least 25% in order to secure good mortgage rates.

A handful of deals for those with smaller 10% deposits do still exist, but rates are high and borrowers can no longer add in stamp duty to the mortgage without incurring higher borrowing costs, as they could during the boom years.

The current stamp duty holiday whereby the 1% rate only applies to properties above £175,000, rather than the usual £125,000 ends on 31 December.

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Caan said: 'This scheme gets rid of those financial obstacles which are holding up the housing market. This means that thousands of people who have been putting off moving or buying their first home can now climb up the property ladder without further delays.'

Pah.

Financial obstacles being that prices are too sodding high, you beardy twunt...

This is just a PR stunt. And a bad one at that.

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Caan's challenge to the big boys such as RightMove, FindaProperty and PropertyFinder is backed by a £1bn pot and loans can be taken out for a two to three-year term, to be paid back monthly with no interest charged.

Do we know who his bankster is so I can stear clear?

I find him the least plausible and most slimey of the Dragons, and that's saying something. He would be the last person I can think of I'd want to owe money to.

Edit: Ah, found it - Hitachi Capital. That well known high street lender. :rolleyes:

Edited by Red Karma

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