With many buyers in the UK struggling to get home loans, a growing number of developers are targeting the Far East, especially Singapore, Hong Kong and Shanghai.
However, many of these overseas nationals are purchasing the properties without even viewing them, making the buyers potential victims of misrepresentation.
For instance, a Hong Kong businessman named Mr He paid a 35,000 pound (S$56,000) deposit for a four-bedroom apartment in London, believing that the unit was just a 40-minute walk from central London. To his dismay, it was a 40-minute journey by high-speed train, according to his lawyer.
In fact, the home was located in Lincolnshire, Eastern England.
He sued the developer for misrepresentation and got his money back even before the case went to court. His lawyer claimed that the developer did so to avoid its marketing material being made public.
“It is a matter of developers saying: ‘Here are some people who are likely to be interested. They probably do not know too much about the market, so why don’t we advertise there’,” said David Eldon, former Chairman of HSBC’s Asia unit, who witnessed the practice taking place over two decades in Hong Kong.
“I think they are being a little economical with the truth,” he added, noting that properties may be sold for higher prices in the Far East.
Big developers such as Taylor Wimpey, Barratt and Berkeley have been courting cash-rich Asian buyers since 2009 when the global financial crisis dampened local demand.
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