SFO reveals buy-to-let scam

A buy-to-let scam, which may have seen over 1,000 flats being sold at heavily inflated prices, is being investigated by the Serious Fraud Office.

At the height of the property boom, between 2004 and 2007, a firm called Morris Properties, which has since ceased trading, claimed its flats would provide buyers with a guaranteed rental income and were priced at as much as 100% above their genuine value. It is thought that the firm may have made around £69 million through the scam but its owner is denying that he did anything unethical or illegal.

Around 133 buyers, who have sought legal representation, are now seeking justice for the scam which took place in several cities across the UK including, Manchester, London, Liverpool and Glasgow. The Serious Fraud Office has launched an official investigation into the scam, which is in addition to the private cases brought by the victims of the alleged fraud.

The Times Newspaper claims several banks including Bradford & Bingley, Northern Rock and HBOS, all of which are now partly publically owned, could lose millions after lending mortgages to investors who were buying properties at inflated prices under similar buy-to-let schemes.