UK regulator warns of housing sale scam
18 Apr 2013
The UK's consumer watchdog Office of Fair Trading (OFT) said that consumers who wanted to sell their houses via so-called "quick sale" companies were in danger of getting misled.
Quick house sale providers offered to buy houses in as little as seven days, but at rates that were discounted to the full market value.
The OFT has warned that homeowners may end up selling their property for much less than what it was worth.
It added that any losses could be very high.
Such companies are known in cases to buy a house, but then cut the price at the very last minute.
According to Cavendish Elithorn of the OFT, businesses offering quick house sales might provide a useful service for homeowners who needed to unlock cash in a hurry, however, they were often used by consumers in vulnerable situations and therefore it was concerned about the risk of consumers being misled and losing out on large sums of money.
Among those identified at particular risk by the OFT are those selling after a relationship breakdown, or the elderly who might need the money to pay for long-term care.
Companies who offer desperate homeowners a quick sale would be investigated by the Office of Fair Trading, after concerns that their customers may be receiving tens of thousands of pounds less than the full worth of their property.
Quick house offered cash sale normally, with emphasis on speed, and promises of completion in as little as five days in some cases. While most firms claimed to offer fair or "realistic" prices and "no hidden fees", consumers had reported cases where a price has been agreed, only to be dropped at the last minute, and being hit with high charges after a valuation had been accepted.
The OFT has undertaken a market study into the industry, and in the process has written to 50 quick house sale firms and calling for information on their business models as also consumers who had used these services to tell it about their experiences.
Activity by these firms had risen in recent years, against a backdrop of falling property sales as also an increasing number of people struggling to repay their mortgages. By the end of 2012, over 150,000 households had fallen behind on mortgage repayments.
