Savills has warned of a “dangerous wobble” in the market for new flats that could have a ripple effect on housebuilders if untrustworthy buy-to-let property syndicates are unravelled.
Many housebuilders sell flats at a discount to property clubs before they are built. Dominic Grace, a director of Savills in charge of sales of new residential developments, said there were serious doubts about the credibility of some buy-to-let property syndicates. He said these promised to buy at least a quarter of the new flats put on the market last year.
His warning came as the Department for Productivity, Energy and Industry closed down three companies involved in one get-rich-quick property fraud and adjourned the case of two other firms alleged to be involved in the scams until June 15. The Royal Institution of Chartered Surveyors welcomed the government’s tough line although it thought it should have come sooner.
References: The Times page 22 12/05/05, The Independent page 68 12/05/05, The Guardian page 20 12/05/05, Financial Times page 1, page 4 12/05/05
