A developer operating in prime central London is offering buyers a deferred-payment scheme.
K10 Group says it’s doing this because of the inability of some purchasers to get mortgages. It says its ‘buy now, pay later’ scheme applies across properties up to and including a £75m Knightsbridge mansion.
Purchasers pay a substantial deposit but are not required to pay the rest for five years. However, buyers do pay a large weekly fee between paying the deposit and the rest of the capital value.
For example, K10 says it’s marketing Culross House in Mayfair for £30m. It would expect a buyer to pay £10m deposit and then, five years later, the remaining £20m.
However, in the interim it will charge the purchaser a fee of £15,385 per week which it says is “to cover occupancy and financing costs.”
K10 claims that should the buyer wish, they could let Culross House to a tenant for a rent of circa £25,000 per week - enough, the firm says, to generate the buyer a profit (after fees to K10) of up to £500,000 per annum.
This deferred purchase scheme locks the buyer into the current pricing, meaning they can’t take advantage of falling prices if they occur: however, it does give them time to secure a mortgage as and when the lending market improves.
A statement from K10 says so many of its clients “want to own and move into a super-prime London home but are put off by the large upfront cash requirement and the current lack of lending in the market.”