Lender's crisis linked to 'grossly overvalued' flats

mattheman · 13 Jun 2009 at 14:01

http://www.guardian.co.uk/business/2009/jun/12/west-bromwich-loans-police-inquiry

BOOM to BUST

Events surrounding the Simon Morris property empire are under investigation by the Serious Fraud Office and West Yorkshire police. Morris's company, SRM Holdings, and 37 subsidiaries went into administration last year, owing £50m. Morris himself, who at one point was a director of Leeds United football club, appeared on the Sunday Times rich list of young entrepreneurs at the age of 29, with assets thought to be worth £69m.

According to documents seen by the Guardian, surveyors used by West *Bromwich in 2006 certified buy-to-let properties at what could have been up to 53% higher than their true value. Employees of valuation companies were among those questioned by police last year, along with Morris himself

Morba · 13 Jun 2009 at 14:03

mattheman · 13 Jun 2009 at 14:05

Morba said:
and?

So many more in the pipe line, large property developers are going to the wall, late this year or the start of next year theres going to be so much supply.

Morba · 13 Jun 2009 at 14:06

they have been going to the wall for ages and there has been lots of empty properties for ages. so what difference does this make?

Dolph · 13 Jun 2009 at 14:13

The fact that Flats are a bad idea for property investment has long been known, people only buy flats because they can't afford a house, so they take comparatively much larger falls when house prices drop as demand for flats plummets.

The news that surveyors have overvalued property is not news either. There's a reason why the West Brom Building society has been involved in frantically trying to restructure itself after all, it would give B2L loans when others wouldn't

mattheman · 13 Jun 2009 at 14:28

Morba said:
they have been going to the wall for ages and there has been lots of empty properties for ages. so what difference does this make?

repos take time to process, upto a year.