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I have tried replying to your comment but it won't allow me.
Really sorry to hear about your situation, I did speak to my investor this week and he is in the same position having had no response from the developer or solicitor.
He is very angry as he wants to put his deposit into a deal I have but is unable to.
I would be happy to give him your details if you want to send them to me.
I hope it all works out and if I hear anything I will update you.
I think all people affected by this now need to seek legal advice.Clifford Tibber, of our legal partner Anthony Gold Solicitors, specialises in these type of cases and was successful in reclaiming monies in a similar case.He can be contacted at firstname.lastname@example.orgHe will charge a small fee to review your case and advise if can assist you.If there is a group of you, he may be able to work on a class action no win/no fee basis, as he has done for other PT members.
Vanessa Warwick Landlord and Co-Founder of PropertyTribes.com **If you have got value from Property Tribes, find out how you can support it in remaining a free to use community resource**
Hi Vanessa and thank you for the tip. I will contact this person right away.
Thanks Vanessa. I have now contacted Clifford.
from today's Guardian
What an almighty mess.
Property Tribes has continually warned of lending developers and JV partners large sums of money. Banks are always willing to lend on viable projects. If an individual or company cannot access funding via banks, then that should form part of your due diligence picture.Excerpt from the article quoting Clifford Tibber of Anthony Gold Solicitors:This risky form of buyer-funded development (sometimes known as investor-led fractional sales) has mushroomed since the 2008 financial crisis, after which banks grew reluctant to finance property. Instead, many developers have turned to individual buyers to fund the entire cost of development, using their hefty deposits to pay for everything from marketing to professional fees and construction costs. Whereas a conventional model of off-plan development sees the buyers’ deposits (typically 10% of purchase price) held in a secure escrow account, and only released on completion of the building, this alternative form of buyer-funded development sees investors paying up to 80%, which can be spent on all manner of costs and fees before construction has even begun.
“It’s an incredibly risky form of investment,” says Clifford Tibber, expert in property law at Anthony Gold solicitors. “Very often the developments are not legitimate ... Developers are bypassing banks and targeting unsophisticated individuals who are willing to throw their life savings at a chance of making big profits.”
Up-date for this thread:SFO opens investigation into suspected fraud
Why don't people listen and keep ahead of property schemes. This board has said many times before the pit falls of such deals. I am afraid you only have yourselves to blame. Only hope is to offset the investment against any capital gains you have.
From Monday's Times
The buy-to-let investors left high and dry on Merseyside
March 11 2019, 12:01am, The Times
The developer behind Liverpool’s New Chinatown scheme took millions of pounds of deposits from buyers
When Wai Shuen Tang put down a £50,000 deposit for a flat in Berry House, a residential development in Liverpool, the teacher from Hong Kong thought that he was making a secure investment in a buy-to-let property to provide for his family’s future. Then the development company behind the scheme, North Point Global, entered an insolvency arrangement without completing the project and Mr Tang, 49, was left empty-handed.
“The financial impact is serious because we are not really well-off,” said Mr Tang’s son, Alex Ng, 30, who with Walker Morris, the law firm, is trying to recover some of the funds.
He is not alone. Abandoned or stalled buyer-funded housing projects are littered across Liverpool. The Times visited eight collapsed or stalled schemes that have attracted substantial deposits from investors after glossy marketing campaigns overseas, promising high-end properties in a region in the midst of a government-backed regeneration. There was no sign of construction activity at any of the projects and in some instances they appeared to have been abandoned.
The Serious Fraud Office is investigating a project included in a book of northern powerhouse investment opportunities marketed in China during a trade mission led by George Osborne
Insolvency practitioners working to recover funds from failed schemes estimate that at least £500 million of buyers’ deposits have gone missing in buyer-funded developments across the North of England. Duncan Swift, an administrator at Moore Stephens, a global accountancy firm working to recoup funds from multiple schemes, estimates that the total figure could be as much as £1 billion.
Investors in buyer-funded schemes commonly are asked for between 50 per cent and 80 per cent of the cost of a flat prior to completion and are promised a guaranteed rental yield. The funding model emerged after banks withdrew from the development finance market in the wake of the global financial crisis of 2008.
Such schemes proliferated in the North of England about four years ago, when the government was heavily promoting its northern powerhouse initiative with a trade mission to China to bring more investment to the region. British investors have been attracted, too, by the high returns said to be on offer, yet the failure of so many projects in Liverpool, as well as schemes in Manchester, Newcastle and Bradford, shows that it can be a risky investment vulnerable to potential fraud.
Louise Brittain, head of contentious insolvency at Wilkins Kennedy, another accounting group, who is working to recover funds from projects across the North of England, said: “These investors have parted with at least half their money, they don’t know where it’s gone and then they have nothing. They have a Land Registry number and a block of fresh air.”
The Serious Fraud Office is investigating a £200 million project included in a book of northern powerhouse investment opportunities marketed in China during a trade mission led by George Osborne, the former chancellor, and attended by Joe Anderson, Liverpool’s mayor, in 2015. The developer behind the New Chinatown scheme, a subsidiary of North Point Global, took millions of pounds of deposits from buyers, many from Hong Kong.
Yet the scheme was never built and now buyers are taking legal advice to see if they can recoup funds from the project, which has since been sold to another developer. It is understood that investors were advised in material produced by the government to do their own due diligence.
Mr Osborne declined to comment. A spokesman for Liverpool city council said: “Another developer has now submitted a planning application for a new [Chinatown] scheme. The city council does not believe it is appropriate to comment upon earlier development activity whilst the Serious Fraud Office has made it known that that is the subject of investigation.”
Liverpool appears to be at the centre of failed buyer-funded projects. However, the council says that it is “overseeing an unprecedented volume of regeneration activity”, with 187 schemes on site across the city worth more than £3 billion. Its spokesman said: “There have been a small minority of private sector-led schemes that have run into difficulties, but the city council does not have the powers to intervene in contracts and land sales solely between private parties.”
Julie Proud, 52, whose son Ben, 28, was among those to lose his deposit at Victoria House, a project in Liverpool that stalled when the developer, a vehicle of Pinnacle Alliance, a property company, was put in administration, said: “There needs to be a serious review of what’s going on from the government.”
Some developers defend the buyer-funded model. Elliot Group has delivered more than 3,000 homes to investors at schemes across the North of England. Elliot Lawless, founder of Elliot Group, said: “When it’s overseen by suitable professional advisers, this is an excellent way to marry developer talent with investors’ funds.”
However, he added: “We would welcome a clear and manageable regulatory regime for the sector. The absence of one is what gives less scrupulous operators headroom.”
Pinnacle Alliance and North Point Global could not be reached for comment.