However, even I was a little shocked following a meeting with an old business friend who at one stage had an interest in estate agency.
He'd heard about several occasions where surveyors were asked by developers to provide valuations on new build apartments. The developer would then present the surveyor with an envelope stuffed with thousands of pounds and a figure written on a piece of paper slipped into the same envelope. The obvious implication being that if they compromised their professional judgement and 'valued up' he would be several thousand pounds better off. If the surveyor refused; the developers would then just move on to another agent until they found one who was prepared to accept the bribe.
These over valuations were vital for many developers to be able to sell apartments at inflated values to unsuspecting investors. Many of these property investors are now left with significant negative equity and are being kept afloat by historically low interest rates.
This is the first time I've heard first hand evidence of these sharp practices and I'd be interested to hear of any other examples.
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This sort of thing has been going on for years, under the radar.
ReplyDeleteDuring the mid 2000's, I was picking up repossessed properties at auction that had been vastly over-valued two or even three years earlier yet the market STILL hadn't caught up to those inflated prices, despite boom conditions.
I very much doubt a single surveyor was ever held accountable, no questions were asked and the Teflon protection of self regulation accomplished what it always does
I knew of many similar fraud & scams on properties I had viewed.
ReplyDeleteone man bought 3 large 7 bed properties for 50k each in the same street.
They were purchased freehold, then subdivided on paper into 18 leesehold apartments(flats).
He completed 1 flat to a reasonable standard but did not do any other building work to the remaining flats/properties.
Then applied to a BTL mortgage company for a release of equity from all his 18 owned flats which in those days was 85%.
All 18 of his non existent flats were valued at 100k each on paper based on the one complete flat although all 18 were valued & listed as complete on the report.
He then took his 85% of £1.8 million pounds and did a bunk leaving 3 practically untouched derelict building split into leasehold Flats but now with an absentee freeholder. When I viewed these property's they were £90k each x3.
Hell if a loss for that now non existent BTL provider.
WHO WAS THE STUPID ONE.
I hope the valuer got well paid.
ReplyDelete