UK Landlord Forum / Life

From buy-to-let to fraud and a lost £100k
July 5, 2009 on 7:20 pm | In News |

A buy-to-let investor tempted by a 'discounted' Manchester new build flat is £100,000 down and was led into mortgage fraud

Richard Dyson, Financial Mail - 5 July 2009

Philip George had suffered a divorce and was unhappy. To rebuild his life he hoped to make a fortune through property.

That was 2006. Today all his money has gone, debts are mounting and bankruptcy looms.

First he lost tens of thousands of pounds in a Bulgarian property swindle. A further £7,000 disappeared in a property-related insurance scam.

Philip was greedy and naive, probably. Unlucky, certainly. But his most ruinous venture was the Manchester flat on which he is losing £1,000 a month and where his mortgage is £100,000 greater than the property's value.

To buy this property, a two-bedroom flat in a vast, canal-side development called Spinningfields, Philip committed mortgage fraud, though he says it didn't seem like it at the time.

- Do buy-to-let losers deserve sympathy?

The flat - built by Westbury, now part of Persimmon - was listed for sale at £356,976. But the two property companies who advised Philip to buy the place, one called JAWS Management and the other RightSource Properties, negotiated a ' discounted' price of £321,200.

When he applied for the mortgage, Philip failed to disclose the discount. Instead he applied for the maximum mortgage of 90% of the higher £356,976 value.

This meant that in March 2007 the bank lent £321,200, which was 100% of the price Philip actually paid. Today the property might fetch only £200,000, say local estate agents.

Source : Landlordzone

Oh man, he made some big mistakes =/

Oddly enough, I was reading more about how Athea Turner and Grant Bovis lost all their money. 5 of his companies went bankrupt, leaving creditors with huge losses. In the mean time, they have to make huge sacrifices- they had to sell their £10m house and downgrade to a £6m house. Imagine that!

Anthea should have stayed with Peter Powell!

Jools