Buyers left £2.7m out of pocket as developer collapses
Nearly 80 buyers, primarily from overseas, are set to lose nearly £3m between them after administrators were called in at a Salford-based developer.
The scheme at Ford Lane was pre-sold to foreign investors, but the scheme did not start on site before developer Prime Noble Properties collapsed earlier this year. According to the appointed administrators, Begbies Traynor and Mazars, it is “uncertain” whether any of the buyers will receive any of their money back.
Overall, buyers stumped up £2.7m for deposits for the apartments, ranging between £91,000 and £5,500; while trade creditors are also owed in the region of £217,000.
According to a brochure for the development, buyers were promised a hotel-style lobby with 24-hour reception and security; “contemporary” kitchens and furnishings; along with smart TVs in each apartment and “free high-speed broadband”. There were a mix of studio, one, two, and three-bed apartments proposed.
The brochure also promised investors at net yield of 7%, with a net annual income of £5,860 and a monthly rent of £580. The developer had also forecast a five-year return of £18,102.
The developer is headed up by sole director Percy Fitzroy Lawson Johnston, and bought the 250-year lease of the site for £400,000 in 2015. Its previous owner was FSL Properties Ford Lane Limited, led by director Philip Wright, according to Companies House; this company was wound up in 2017, but retained the freehold of the site.
The site first secured planning permission for 119 apartments in 2006.
According to the administrators, 78 of the 119 flats were sold on a leasehold basis; the freehold of the site was then sold by FSL to another company. The site had been cleared, with Cruden Construction instructed to demolish derelict buildings and carry out groundworks. This completed in late 2017.
However, funding that had previously been secured did not come forward, and although Prime Noble tried to attract alternative funding, the developer then attempted to sell the leasehold site to recoup buyers’ monies, appointing Knight Frank with a view to repaying investors’ funds from the sale proceeds.
The developer looked to buy the freehold from the liquidators of FSL, but this was never completed after investors withdrew their support for the proposal.
Following this, administrators were appointed in February, and the site is now being marketed by JLL and Wignall Brownlow.