Investors sue over buy-to-let losses
INVESTORS in East Yorkshire are among more than 100 nationwide caught up in a buy-to-let scheme being investigated by police.
A number of people in the region are among 130 in a group legal action which is being prepared against a Leeds-based business, Morris Properties and several conveyancing solicitors.
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Solicitor Max Gold, whose firm is acting on behalf of clients against a buy-to-let property company, says arrests have been made in connection with the case
The firm specialised in student new build flats and refurbished homes in Leeds and the north east. It sold more than 1,000 properties before going bust last summer.
According to The Sunday Times, detectives from the Serious Fraud Office (SFO) are investigating alleged scams involving properties in cities across the north of England, including Hull.
The report suggests the deals could have cost investors and banks millions of pounds.
Investors claim the properties were overpriced when they bought them and that pledges of rental income did not materialise.
Max Gold, a Hull-based solicitor whose firm is acting on behalf of clients across the country, said: "They claim that they bought investment properties which included covering solicitors fees and mortgage arrangement for them from various companies forming parts of the Morris group.
"These properties are said to have all been well overvalued when they were being bought for investment and the potential incomes were not being achieved."
A Hull builder, Richard Lee, is reported to be the single biggest investor in the Morris scheme and says he is now £6m in debt.
A spokesman for the SFO said they were looking into a case but could not confirm exact details.
Simon Morris, the man who ran Morris Properties, reportedly denies any wrongdoing and is said to be planning legal action against the police. He says people simply invested at the wrong time and with poor judgement.
West Yorkshire Police have confirmed they are investigating and arrests have been made.
Are you one of those taking legal action? If so, call the Mail on (01482) 315270.
15 Comments
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by Ernesto, Hull
Tuesday, December 23 2008, 9:57AM
“Arrw the poor babies played the game of capitalism and got burned. Good.
If you back the wrong horse then don't expect to be able go to the bookies and demand compensation”
by Richard, Tigerland
Monday, December 22 2008, 8:11PM
“Pete, If someones pension depends on them overcharging for rent, I hope they lose the lot, and when the house gets repo'd, the tenant buys it for a song. Houses are for living in, not tools for extorting money out of young families.”
by Pete, Hull
Monday, December 22 2008, 7:41PM
“Richard tigerland. No one gets a pension for free. People with a pension pot that they had worked and saved for had a choice.
Put their pension pot into housing rather than spend the money and get hand outs, or put in a bank paying %1 interest or in shares that have nose dived.
Do not be critical of some one saving and investing for their pension of the future”
by Richard, Tigerland
Monday, December 22 2008, 6:38PM
“Thats exactly what i was getting at John, these people's greed is only matched my their stupidity in thinking they could get a pension for free.”
by John, Leyland (ex-Hull)
Monday, December 22 2008, 6:27PM
“Richard's crack on in my opinion. These buy-to-let vultures, along with estate agents and mortgage companies, are those who've been pushing up the house prices for the past however many years. Although some people have ended up with a lot of equity, they still need to buy a house of the same value when they sell, so its only actually relevant when they come to sell up.
All that has happened is that rents and mortgage costs have increased dramatically in this time, so people like myself now have to pay double what we would five years ago... and who is it getting this money? Landlords, mortgage companies, estate agents.
I went away to uni, and upon finishing rents have gone up so much that the extra income I've got from being able to get a better job doesn't even cover the increases in rent.
They can crash and burn in my opinion. Just greedy people looking to make a quick buck, based on the premise that people need to live somewhere and are forced to pay the going rate.
I'll sit back patiently paying my rent, watch these vultures go bankrupt, then happily get myself a reasonably priced house when it all settles down.
They'll get no sympathy from me :D”