A national paper recently reported on six buy-to-let firms, who have been taken to court by the newly named Department of Productivity, Energy and Industry (previously the DTI), for selling get-rich-quick property schemes.
Mark Alexander, managing director of The Money Centre, commented: “There are several buy-to-let companies in the industry who are continuing to damage the reputation of the market as a whole. The recent bad press is scaring investors from entering the market, and damaging the image of the many reputable companies, who operate ethically. It is really sad to hear of buy-to-let companies promising unrealistic get-rich-quick schemes to potential, first-time investors, and I am pleased to hear these businesses have been put under the spotlight for damaging the reputation of the industry as a whole, and creating distrust amongst potential investors.
“More and more people are aware of the huge personal financial benefits of buy-to-let investment, and as a result, are attracted to companies who are promising easy, hassle-free ways of entering the market and making a quick fortune. These companies are taking advantage of naïve investors, and are not making people fully aware of the commitment and risks involved.
“Several key spokespeople in the buy-to-let industry have joined this debate. And I am wholly supporting the call for the government and Financial Services Authority (FSA) to expose companies currently damaging the reputation of the buy-to-let sector, and to introduce stronger regulations. We at The Money Centre are very keen for stricter regulations to come into place, ridding the market of buy-to-let ‘cowboys’ who are discouraging people from entering the market completely. We want to ensure new investors are placing their personal finances in the hands of the right people, and want to see the reputation of the market restored to its rightful position. But to see this happen, we need new regulations in place to rid the sector of brash promises and ‘overnight millionaire’ schemes.”
