Homeowners at risk from rogue operators
Dirty tricks are being employed to maximise sale commissions
Friday 09 August 2013
Rogue property professionals are set to home in on unsuspecting homebuyers as prices continue to rise, legal specialists have warned.
The average cost of a UK home rose by almost 1 per cent in just four weeks in July to £169,624, according the Halifax House Price Index, with sales in the first six months of 2013 6 per cent higher than this time last year.
Improved economic data, consumer confidence and lending criteria, along with the effect of government homebuyer and funding schemes have all had an effect. In some regions, the increase has been so marked speculation abounds over a property bubble.
But unsuspecting purchasers are at far greater immediate risk from rogue operators looking to cash in on a rising market by overvaluing property to maximise their commission on the sale.
"There is greater opportunity for property valuations to be distorted as rapid price rises mask overvaluations," said Stephen Hill, partner at solicitors Bolt Burdon Kemp. "In some instances, this could amount to a fraudulent attempt by a rogue valuer, acting on behalf of the mortgage lender but in the interests of the seller, to overvalue the property. A rogue solicitor may also be involved to help tie up the transaction before the buyer notices that anything might be awry."
With the transaction complete, the buyer is left with the legacy of overpaying on the property. Should they face financial difficulty or indeed, a property bubble, they could very quickly be facing the effects of negative equity if they have to move.
"During a housing market bubble, overvaluations are not uncommon. Many were found to have occurred during the housing market boom that preceded the credit crunch in 2008 and previously during the housing boom of the 1980s. There is now concern that the current market bounce could cause the same to happen again," Mr Hill added.
"It is vital that buyers use extra caution. Instead of relying on the services of professionals [suggested to them] – they should seek their own independent advice and carry out some of their own basic online research too."
He urges buyers and sellers to seek their own independent advice, to go to reputable, high street estate agents and avoid websites offering to sell property quickly.
Quick-sale property firms are also coming under scrutiny from the Office of Fair Trading (OFT) for allegedly duping so-called "distressed sellers" – often vulnerable or elderly adults – out of a significant proportion of their house value.
Opening a formal investigation into three quick sale companies this week, the OFT has highlighted that, in addition to forgoing between 10 and 25 per cent of the value of their property in exchange for a very rapid sale, some vendors may also suffer from tactics designed to further reduce the price paid.
These include reducing the price offered at the last minute, making misleading claims about the value of the property or level of discount to be applied and inducing sellers to sign long-term exclusivity agreements that prevent them selling to other buyers, with severe penalties for breach of contract.
Independent Partners: Get fee-free expert mortgage advice and find the right mortgage deal for you.
Simon Read: Catch 22 for borrowers who are turned down by banks
No Pain No Gain: Small shareholders have been marginalised, but don’t give up
Simon Read: There may be trouble ahead for cohabiting couples who don’t make a will
Money Insider: Would £150 make you switch banks?
Bargain Hunter: Find the deals that have real value beneath the Black Friday hype
- 1 'Not suppost to cry': 9-year-old lists the worst things about being a boy
- 2 Iggy Azalea responds to Eminem rape lyrics: 'I'm bored of old men threatening young women'
- 3 Woman opens professional cuddling shop – gets 10,000 customers in first week
- 4 Lana Del Rey rape video: Marilyn Manson denies involvement in shocking leaked footage
- 5 Winnie the Pooh banned from Polish playground for being 'inappropriate hermaphrodite'
Rochester by-election: Ukip gains second MP as Tory defector Mark Reckless holds seat
'Muslims pre-date Columbus in discovering America,' says Turkish president Erdogan
Rochester by-election: Labour MP Emily Thornberry resigns after posting white van and England flags tweet
'Beast of Bolsover' Dennis Skinner takes Ukip MP Mark Reckless to task moments after he is sworn in
France 'blocks' Russian sailors from boarding a warship
Former Tory PM Sir John Major says 'we would not have an NHS without migrants'
iJobs Money & Business
Voluntary Only - Expenses Reimbursed: Reach Volunteering: Age Concern Slough a...
Voluntary Only - Expenses Reimbursed: Reach Volunteering: Crossroads Care is s...
£20000 - £25000 per annum + OTE £35,000: SThree: We consistently strive to be ...
£50000 - £90000 per annum + benefits: Ampersand Consulting LLP: Markit EDM (CA...
Day In a Page
A deceptively spacious, beautifully presented Georgian home with 3000sq ft of living space and five reception rooms
A five-bedroom Victorian home with four receptions, superb gardens and paddock in Pembury
An eight-bedroom house on the south side of the The Green with cinema, wine cellars and summer house
This 17th century beauty is full of rustic cosiness, while the detached home office means you can also run a business
This five-bedroom red-brick beauty overlooks the village green and sits in just under two acres of land
Four exclusive apartments in a Grade II-listed former medical school with 2,275 sq ft of living space and 18ft ceilings
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens