Here's why the property market needs tighter regulation

As the last property bubble burst, some companies thankfully went under. But with regulation in the market still so feeble, investors should beware.

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.

Recommended

No let up in house price rises as new records set
House prices

No let up in house price rises as new records set

House prices continued to boom in April, with £20,000 being added to the price of the average home in the last 12 months.
14 May 2021
The best Tudor properties for sale now
Houses for sale

The best Tudor properties for sale now

From a timber-framed hall house dating back to 1542 in Swaffham Bulbeck, Cambridge, to an Elizabethan farmhouse in Norfolk, eight of the best Tudor pr…
14 May 2021
Three commercial property funds that go beyond offices and shops
Property

Three commercial property funds that go beyond offices and shops

When it comes to commercial property, these three real-estate investment trusts in promising niches look most appealing, says David Stevenson.
11 May 2021
The return to the old nine-to-five is a matter for business, not government
UK Economy

The return to the old nine-to-five is a matter for business, not government

Should we stay working from home or go back to the office? Whatever we decide, let’s keep Whitehall out of the question, says Matthew Lynn.
9 May 2021

Most Popular

US stocks look expensive – here’s what to own instead
Investment strategy

US stocks look expensive – here’s what to own instead

Right now, US stocks are among the most expensive in the world. So if you want a decent return on your investments, you should look into diversifying …
17 May 2021
How will Joe Biden’s capital gains tax rise affect crypto prices?
Bitcoin & crypto

How will Joe Biden’s capital gains tax rise affect crypto prices?

The US president wants to increase capital gains tax – and that’s going to hit a lot of American cryptocurrency speculators. Saloni Sardana looks at h…
14 May 2021
Inheritance tax planning: the rules around gifting
Inheritance tax

Inheritance tax planning: the rules around gifting

There are plenty of legal ways to minimise an inheritance tax bill. Perhaps the simplest is to give away assets to reduce the size of your estate. Dav…
11 May 2021