Hundreds set to lose deposits as property firm falls into administration

Hundreds set to lose deposits as property firm falls into administration




.

Nearly 500 private investors face losing deposits totalling £6.5 million after a Lancashire-based property agent collapsed into administration. 

Dylan Harvey Residential fell into administration owing around £100 million, stating it was adversely affected by problems in the property market, as well as developer failures.
 
Hundreds of creditors who have paid deposits between £5,000 and £20,000 for off-plan reservations for properties that were never actually built are now said to be considering legal action.
 
Dylan Harvey Residential acted as sales agent for numerous projects in the North West, attracting investors to schemes throughout Manchester and once stated a turnover of £50 million.  
 
In a statement, the group said: “Lack of funding availability has severely impacted both developers and the purchaser's ability to secure mortgage funds. DHR has not been immune to these factors. Investors have been unable to secure mortgage funds to complete on key schemes over the past 12 months which has had a material adverse impact on DHR's cash flow.

“Further, a number of DHR's contractual partners have failed to secure development funding to commence planned developments. DHR has done everything in its power to try and ensure delivery of all its developments but following the financial loss of significant deposits paid to now-insolvent developers, is no longer viable as a going concern.”
 
Mark Getliffe and Diane Hill of accountants CLB Coopers have been placed in charge of handling the administration of the company.
 
Mr Getliffe said: “We are working hard to finalise the full financial position and explore all the options in respect of any value which can be recovered for creditors. The business appears to have failed because of the domino effect of the residential property market grinding to a halt. It was also affected by one of its contractual partners, Fresh Developments, going into liquidation in April this year, owing it £1.7m.”

He also added that in some ways, investors may have limited their potential losses by not having to contractually complete on properties valued at the peak of the market and for which mortgages may now no longer be available.

Leave a comment