The Great British Property Scam pt 7
If those professionals mentioned above all support the property development arena it`s the developers who create it. Without developers the support acts wouldn`t exist. As the tsunami in 2008 gathered ground the developers either went out of business, hibernated until the economic climate improved or became more “creative” in their approach to funding methods. Sadly, it`s that latter group who were responsible for what has become The Great British Property Scam.
As the financial collapse of 2008 took hold the unscrupulous developers saw that it was easier to break up a property and sell piecemeal and make a lot more profit in doing so. As a result, a glut of allegedly appealing investments in car parking spaces, storage units, student accommodation blocks, hotels and more recently care homes hit the market. They all carried promises of glittering annual returns which were in many cases totally unachievable and the investments are completely unsaleable by their owners.
In early 2021 a nationally recognised firm of business agents valued an investors unit in a block of c500 student accommodation units in Bradford for the purposes of a group claim being made by investors. The unit was described as worthless by the firm. The investor had paid circa £60,000 for it and had ongoing liabilities to pay each year. Not only was the unit worthless it is now a liability due to service charges and ground rents that were payable on them.
On 30 April 2019 the court made an order to wind-up four Store First companies in the public interest by consent between those four companies and the Secretary of State.
The scheme, which sold storage pods to investors, was promoted by former Top Gear presenter Quentin Wilson. He appeared in several advertisements endorsing the scheme and unfortunately invested in Store First himself.
Store First offered a starting investment of £3,750 and a maximum of £1 million. Over a thousand individual investors are thought to have been affected by the alleged fraud, including those who invested their pension funds through the Capita Oak Pension and Henley Retirement Benefit schemes along with many individual SIPPS. The amounts invested total over £120m. The company guaranteed investors high returns and a buy-back scheme, but these promises were not kept.
The Serious Fraud Office has opened an investigation into the Capita Oak Pension and Henley Retirement Benefit schemes, Self-Invested Personal Pensions (SIPPS) as well as other storage pod investment schemes.
Many developers who saw fractional sales as an easy way to fund a project now find themselves being chased or sued by investors for the return of their purchase monies. The following is a small selection. Where known we have added the approximate number of individual units (rooms) they have developed or sold from information obtained from the Land Registry.
• ALPHA Developments (c2500)
• MBi Qualia Care (700+)
• St Camillus (90+)
• Shepherd Cox (380+)
• Carlauren (650+)
• Dylan Harvey (1000+)
• Elliot Group (5000+)
• Northern Powerhouse Developments (780+)
• D.J. Suites / Daniel Johns (1400+)
• Pinnacle (880+)
• Signature Living
NB. Source: HM Land Registry. Only those rooms which have been registered are enumerated.
Many of these are already in administration. Some are the subject of Group Litigation claims. They have all carried out numerous developments where individual rooms in hotels, care homes and student accommodation have been sold to investors who have now lost money. They form part of a list of around 250 similar developments where a total of 25,000 individual units have been sold. The list is by no means complete as previously unknown developments are regularly coming to the fore.