Lancashire-based property company Dylan Harvey Residential has been placed into administration.
Its creditors include 500 private investors, who had paid a total of around £6.5m in deposits to the company for off-plan flats that have not been delivered.
The company had a turnover of £50m and liabilities of £100m in April this year.
It acted as a broker, typically taking deposits from buy-to-let investors of £5,000 to £20,000 for off-plan flats.
It entered into contracts with the developer once reservations had been secured.
The firm had faced the threat of legal action by three separate groups of private investors, who had complained that schemes on which Dylan Harvey had taken deposits had not been built.
These include Ask Developments’ Clippers Quay in Salford Quays, plus schemes by unnamed developers including
Mark Getliffe, of administrator CLB Coopers, said: “The business appears to have failed because of the domino effect of the residential property market grinding to a halt.
“It was also affected by one of its contractual partners, Fresh Developments Ltd, going into liquidation in April this year, owing Dylan Harvey Residential £1.7m.
“In some ways not having to contractually complete on properties valued at the peak of the market and for which mortgages may now no longer be available may have limited the potential losses to the clients.”
The collapse of the company does not affect the delivery of the residential element of the
