Home—Blog—Here's why the property market needs tighter regulation
Feb 09, 2010, 04:58
Posted byMerryn Somerset Webb
Comments (7)
When the property bubble collapsed, we were very pleased to see the back of property sales company Inside Track.
We always hated the way it operated – getting people to come to "free seminars" and then bulldozing them, via the promises of being a millionaire in "three years or less," into paying thousands of pounds to go on another seminar and then to buy overpriced property.
The idea was that would-be millionaires would buy flats at huge discounts to the market price from Inside Track's sister company Instant Access, "the UK's leading membership introducer of off plan residential property in the UK and internationally (primarily the US – Orlando – and Spain)," and would do so with brilliant mortgages from their other sister company Fuel Investments.
It all ended in tears of course. The huge discounts didn't exist. There was no "instant equity" and scores of people lost everything they had to false promises of easy money. Eventually, Inside Track called a halt to its parade of misery and declared itself bankrupt. We were thrilled, but we were also hopeful: we hoped that the publicity given to Inside Track and others like it in the wake of the property crash would give some impetus to the calls to regulate the property investment market in the same way as other investment markets.
It didn't. And now they are back.
Less than two years after folding Inside Track, and even as the property market gears up for the next leg down (see John Stepek's Money Morning for more on this), the two men behind it, Jim Moore and Tony McKay, have set up new company IAP Global, says the FT's Claer Barrett.
Once again, the team are drawing people in with "free seminars" and then attempting to persuade them to part with fees of £40,000 or so to acquire portfolios of properties. Once again, financing is risky and the main promise is of free money in the form of "instant equity" (of at least £25,000 on each property in this case). And once again that instant equity doesn't appear to exist: "market evidence obtained on properties featured in their sales presentation suggests such discounts are questionable," says the FT. Property TV presenter Phil Spencer has been used in IAP Global's marketing without his permission. He has, quite rightly, complained, saying that he is "appalled and disgusted" that "this bunch" are using his name. We are just appalled and disgusted that no one in the government has seen fit to use the last two years to legislate this bunch out of existence.
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Leave a comment
(10 February 2010, 09:41AM) Complain about this comment
So, can't you get the Housing Minister in front of a camera and ask them why this lot are still being allowed to draw in suckers?Why aren't the Serious Fraud Office investigating them?
(10 February 2010, 10:08AM) Complain about this comment
Sorry Claer but this is ancient history - several papers ran the IAP Global story at least a year ago!
(10 February 2010, 12:19PM) Complain about this comment
@Tony: I find this info very useful.. duplicated info is not always a bad thing, especially important info like this one.. unless you are an IAP yourself!
(10 February 2010, 12:50PM) Complain about this comment
Everything the government does it seems is designed to keep property artificially inflated. They care nothing about people only prices. High prices means votes, and high prices means more solvent banks. It’s easy to see the incentive here.The whole market sits on house of cards resting on phoney valuations, banking obfuscations, government guarantees (which can never be honoured) and money printing. I don't care much about hapless investors getting conned. But when taxpayers and savers are bailing them out (by supporting prices), that’s another matter.
(10 February 2010, 04:00PM) Complain about this comment
Merryn seems to have more faith in regulation than the rest of the nation? Hector Sant and the mighty FSA failed even to see, let alone stop, a banking system than took £1000 in deposits and lent out multiples of 10 to 40 that amount. No proposed property regulator would be able to clean up Moore and McKay... why? Just read the small print of their ads.... there is a disclaimer of responsibility for investment decisions made by clients. They charge £37,000 for finding 6 properties plus £10,000 profit on each, once re-mortgaged. You pay for newsletter advice plus management. They are in the clear. They claim to have bought back the old Instant Access company from the administrator... a well known bankruptcy con facilitated by Labour Party legislation designed to put jobs before creditors. We need to regulate the Labour Party not entrepreneurs?
(13 February 2010, 08:30PM) Complain about this comment
It always pays to keep pointing out cons - because there is a sucker born every minute.I know it is hard to understand how anyone could be stupid enough to fall for this one after all that has gone before, but people's naivety is staggering. Politicians have short memories, the only way to get a particular con outlawed is to keep banging on about it.
(16 February 2010, 03:09PM) Complain about this comment
Perhaps the financial world is in such a mess because either people cannot add up or are so careless that they make errors when they do. The cover story on "Moneyweek" for the 12th February had a section titled "We can't put off the pain forever". Halfway through, there was a calculation: "That means that base rates 'should' be 6.9% and mortgage rates 2% above that at 7.9% - ..." . Not when I went to school!
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