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Solicitor's Email To Land Registry

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Interesting post on Motley Fool....

As a very infrequent visitor to this board I thought some of you might be interested in the following email I sent to the Land Registry. I've deleted the information that could identify the property but all the figures are unchanged:

I recently acted for a client in connection with the purchase of a flat in *****, Plot ** in the ***** development by ***** Ltd. The relevant title number was *****.

The reason I am writing to you is my very strong concern about the way the property was sold, and the potential for misleading members of the public who rely on the data supplied by the Land Registry.

The lease states that the premium paid was £130,950. This will be the price recorded by the Land Registry, and will presumably be used in the Land Registry’s analysis of property prices. It is also the figure that people will see when looking at the Land Register to value comparable flats.

However, the seller offered a `Schedule of Incentives’ as follows:

5% deposit paid £6,547.00

Towards legal fees £2,000.00

Towards removals £2,000.00

Stamp Duty paid £1,309.00

Cash back payment £5,403.00

TOTAL £17,259.00

Consequently, the `real’ price paid by my client for the property was only £113,691. The apparent price paid was therefore overstated by more than 15%.

It is obviously common practice in the building industry to offer incentives to buyers. However, in over 25 years in practice I have never seen incentives of anywhere near this amount.

I therefore suspect that this series of discounts is a deliberate strategy on the part of the developer to prop up the apparent value of the property.

Prospective buyers and mortgage valuers will presumably use one of the websites with access to Land Registry data such as nethouseprice.com. I have just used that facility myself to check the prices for Craggs Row, and although I can’t find any properties in Russell Court there are 25 flats listed for Bedford Court. Out of the 25 flats listed, 16 have prices ending in `£95’, which looks like a developer’s price rather than a genuine one.

I suspect that in virtually all of these 25 cases the price has simply been transposed from the lease. I also suspect that in all of these cases the discounts offered by the developer meant that the real price paid was very substantially less.

My client was a cash buyer, so I did not have to report this situation to any mortgage lender. I sincerely hope that the solicitors acting for other buyers on this development who were obtaining mortgages did so, otherwise I would consider them negligent, and possibly even condoning a form of mortgage fraud.

I’m sure this is not an isolated incident, and if it’s happening in Preston it’s probably happening nationwide.

I am therefore very concerned that the data being kept by the Land Registry could be seriously misleading, and I would therefore suggest that steps should be taken by the Land Registry to identify `incentives’ such as this so that only the net price paid would be recorded. This would give a much more accurate picture of property prices, and would also help to prevent mortgage fraud.

I am copying this email to the Land Registry head office and also to the Property Section of the Law Society.

I look forward to hearing from you.

http://boards.fool.co.uk/Message.asp?mid=1...p;sort=postdate

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Guest The_Oldie

It would seem that Motley Fool didn't like that post.

Edit: For the benefit of one particular proven lying toad, the above is an observation not a complaint or criticism.

The message you're trying to access has been removed from the boards. The most likely reason for this is that the message violated our Fool's Rules about appropriate content. Either that or it was swallowed up by intergalactic space beasts from the planet Xeenu.

Please check out The Motley Fool's Terms and Conditions of Service:

http://www.fool.co.uk/help/foolsrules.htm

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Guest The_Oldie
However, the seller offered a `Schedule of Incentives’ as follows:

5% deposit paid £6,547.00

Towards legal fees £2,000.00

Towards removals £2,000.00

Stamp Duty paid £1,309.00

Cash back payment £5,403.00

TOTAL £17,259.00

Consequently, the `real’ price paid by my client for the property was only £113,691. The apparent price paid was therefore overstated by more than 15%.

Given the number of unsold new build flats, this level of discounting by builders doesn't surprise me in the least.

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Guest Bart of Darkness
Damn those intergalactic space beasts from the planet Xeenu! :angry:

Is there no limit to the swathe of VI's ranged against us? :(

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A couple of years back I looked at some flats in Exeter, (near the big tescos)

I worked with someone who had paid about £170,000 for his. Two years before

When I went in identical flats were being sold for £140,000.

Several incentives were being offered, the normal cashbacks, fees, stamp duty.... etc...

To the value of £10,000

so that is £130,000

I suggested a further £10,000 to land me... and this was offered...

I then declined saying that I was concerend that prices may fall...

I recieved a sneer and was told that prices wouldn't drop...

I pointed out that they had dropped by £10,000 in the last ten minutes...

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Guest grumpy-old-man

just wait until the anomalies in the stats appear.

The statasticians on the board will be pulling their hair out when they realise that some of the stats are & have been manipulated.

mark my words. :ph34r:

thanks for the info Spirit.

Edited by grumpy-old-man

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It was probably deleted as they have a duty of client confidentiality and there are data protection issues.

Yes he deleted stuff but it doesn't take much detective work to guess what the address "might" be from the sentence;

"I have just used that facility myself to check the prices for Craggs Row, and although I can’t find any properties in Russell Court there are 25 flats listed for Bedford Court."

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I suggested a further £10,000 to land me... and this was offered...

I then declined saying that I was concerend that prices may fall...

I recieved a sneer and was told that prices wouldn't drop...

I pointed out that they had dropped by £10,000 in the last ten minutes...

:lol:

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Is there no limit to the swathe of VI's ranged against us? :(

The property market is on a knife edge. The VIs know full well that adverse data will tip it down into the abyss. Sentiment is everything and they must keep the data positive at all costs. You also have to remember that not only are "incentives" excluded from the Data but also the cost of any improvements as the LR Index likes to use so called "like for like" sales that ignore whatever improvements were included in a repeat sale.

The only reliable data we have is anecdotal or actual resales after taking into account enhancements. Perhaps the only useful barometer of where the market is going is the repossession stats and even these can be massaged by central government to hide embarassing numbers. Dr. Bubb's builder stocks are also a useful indicator as the bottom line in the annual accounts would normally reflect the state of the housing market in terms of profit.

IMO, the old saying "you can run but you can't hide" will play out as the VIs and government can only suppress truth for so long without it becoming so obvious that the propaganda becomes a source of embarassment. The memorable CNN film of Baghdad Bob denying that the coalition was in the city as US and UK tanks passed by in the background comes to mind.

The bottom line: the housing market is, in all liklihood, in far worse shape than the VIs and government want us to believe. A HPC is NOT in their interests.

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Guest Shedfish
Is there no limit to the swathe of VI's ranged against us? :(

the Vogons too have moved from bad poetry into bad property - you'll find them waxing semi-literate about conservatories at any dinner party

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Guest grumpy-old-man
A couple of years back I looked at some flats in Exeter, (near the big tescos)

I worked with someone who had paid about £170,000 for his. Two years before

When I went in identical flats were being sold for £140,000.

Several incentives were being offered, the normal cashbacks, fees, stamp duty.... etc...

To the value of £10,000

so that is £130,000

I suggested a further £10,000 to land me... and this was offered...

I then declined saying that I was concerend that prices may fall...

I recieved a sneer and was told that prices wouldn't drop...

I pointed out that they had dropped by £10,000 in the last ten minutes...

very good apom. :D:D

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Been saying this for years. So called "cashback" scams etc are fraud pure and simple. The intention being to mask the true price of the sale.

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The real sh1t will hit the fan when 'owners' try to sell their 'beautiful, luxury' flats after 'owning' for 2 or 3 years after 30-50% rises in IRs. They can't offer incentives like developers.

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Cash backs have long been associated with new build flats. To such an extent that it's hard to believe Lenders don't know it is happening. It's basically a con to make muppet landlords buy BTL at what they believe is a discounted price.

Of couse this may mean that when certain posters gleefully provide us with examples of flats falling in value by 15-20% over a very short time scale ~ in reality they haven't fallen at all.

:)

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Been saying this for years. So called "cashback" scams etc are fraud pure and simple. The intention being to mask the true price of the sale.

100% agree.

If the LR is aware, which clearly it is, that fictitious sale prices are being recorded, then it is complicit in defrauding any future buyer of such property, and indeed buyers in general.

From the figures quoted, there is also a fraud being perpetrated by the Treasury, since the buyer is paying stamp duty on the full price rather than on the actual price paid, overstating the tax paid.

It would be the equivalent fraud to paying VAT on advertised prices for goods and services instead of sale or discounted prices.

It is clear fraud.

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This is hard evidence, this guy needs to contact the OFT as they are currently investigating these practices.

If he is genuine he should also contact WatchDog and WhistleBlower on the BBC, an investigation on there would really blow wide open what's going on.

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Maybe we should go round all the builders in our area and see what kind of deals we can get.....

Say on a house get the best deal we can and then say we will do it as long as they cut the deal crap and just give it to us at the real rock bottom price. Then we ask for it in writing and circulate it a bit! ;)

HPC here we come! lol

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What does VI stand for anyway? :blink:

Vested Interest.

Estate agents, banks, governments are the 3 main VIs I can think of. Others include - developers, landlords, news papers, speculators, buy-to-let (BTL) investors, owner occupiers (OO). However, lets not forget, many people on this website have sold-to-rent (STR - including me) and also have a vested interest in the housing market.

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