Homeowners at risk from rogue operators

Dirty tricks are being employed to maximise sale commissions

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.

Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    SThree: Trainee Recruitment Consulant

    £20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250...

    Guru Careers: Financial Controller

    £45 - £55k DOE: Guru Careers: A Financial Controller is required to join a suc...

    Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

    £12500 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

    Recruitment Genius: Sales Adviser - OTE £24,500

    £22500 - £24500 per annum: Recruitment Genius: Inbound and outbound calls with...

    Day In a Page

    Mullah Omar, creator of the Taliban, is dead... for the fourth time

    Mullah Omar, creator of the Taliban, is dead... again

    I was once told that intelligence services declare their enemies dead to provoke them into popping up their heads and revealing their location, says Robert Fisk
    Margaret Attwood on climate change: 'Time is running out for our fragile, Goldilocks planet'

    Margaret Attwood on climate change

    The author looks back on what she wrote about oil in 2009, and reflects on how the conversation has changed in a mere six years
    New Dr Seuss manuscript discovered: What Pet Should I Get? goes on sale this week

    New Dr Seuss manuscript discovered

    What Pet Should I Get? goes on sale this week
    Oculus Rift and the lonely cartoon hedgehog who could become the first ever virtual reality movie star

    The cartoon hedgehog leading the way into a whole new reality

    Virtual reality is the 'next chapter' of entertainment. Tim Walker gives it a try
    Ants have unique ability to switch between individual and collective action, says study

    Secrets of ants' teamwork revealed

    The insects have an almost unique ability to switch between individual and collective action
    Donovan interview: The singer is releasing a greatest hits album to mark his 50th year in folk

    Donovan marks his 50th year in folk

    The singer tells Nick Duerden about receiving death threats, why the world is 'mentally ill', and how he can write a song about anything, from ecology to crumpets
    Let's Race simulator: Ultra-realistic technology recreates thrill of the Formula One circuit

    Simulator recreates thrill of F1 circuit

    Rory Buckeridge gets behind the wheel and explains how it works
    Twitter accused of 'Facebookisation' over plans to overhaul reverse-chronological timeline

    Twitter accused of 'Facebookisation'

    Facebook exasperates its users by deciding which posts they can and can’t see. So why has Twitter announced plans to do the same?
    Jane Birkin asks Hermès to rename bag - but what else could the fashion house call it?

    Jane Birkin asks Hermès to rename bag

    The star was shocked by a Peta investigation into the exotic skins trade
    10 best waterproof mascaras

    Whatever the weather: 10 best waterproof mascaras

    We found lash-enhancing beauties that won’t budge no matter what you throw at them
    Diego Costa biography: Chelsea striker's route to the top - from those who shared his journey

    Diego Costa: I go to war. You come with me...

    Chelsea's rampaging striker had to fight his way from a poor city in Brazil to life at the top of the Premier League. A new book speaks to those who shared his journey
    Ashes 2015: England show the mettle to strike back hard in third Test

    England show the mettle to strike back hard in third Test

    The biggest problem facing them in Birmingham was the recovery of the zeitgeist that drained so quickly under the weight of Australian runs at Lord's, says Kevin Garside
    Women's Open 2015: Charley Hull - 'I know I'm a good golfer but I'm also just a person'

    Charley Hull: 'I know I'm a good golfer but I'm also just a person'

    British teen keeps her feet on ground ahead of Women's Open
    Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

    Turkey's conflict with Kurdish guerrillas in Iraq can benefit Isis in Syria

    Turkish President Erdogan could benefit politically from the targeting of the PKK, says Patrick Cockburn
    Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn or a return to a Labour government

    Our choice is years of Tory rule under Corbyn or a return to a Labour government

    Yvette Cooper urged Labour members to 'get serious' about the next general election rather than become 'a protest movement'