In just one example of a buyer-funded development gone wrong, property company North Point Global sold a set of developments in the city of Liverpool with an estimated worth of £360 million (U.S.$506M) to foreign investors. According to comprehensive reporting by the Guardian newspaper—which is the subject of a legal complaint by Liverpool City Councilor Gary Millar, who has been intimately involved in the scheme—the company has “pulled out of its planned suite of projects across the city and stopped picking up the phone, leaving buyers to believe they are the victims of a ruthless scam.” The properties were marketed to investors in China and Hong Kong with promises of high yields. In one example, a Hong Kong investor was convinced to pay 80 percent of the price of a student accommodation upfront, with promises of 6 percent interest on the deposit, and a guaranteed 9 percent return in rental income. Later, buyers received requests for further funds to complete the building, but then North Point Global announced it was ending the project—which had not actually even been begun—and was unable to refund the buyers’ deposits.
In what is a pattern with such schemes, they are riddled with conflicts of interest, with individuals working as directors of the development companies, as contractors and as ‘independent surveyors’ at companies all registered to the same address. In addition, legitimacy was conferred on the project through its association with local government and, in one case, with the former Chancellor of the Exchequer, George Osbourn, who endorsed several projects while he was Chancellor on a government trade mission to China in 2015. At one moment he described himself as tag teaming with Joe Anderson, the mayor of Liverpool, to sell the investments to Chinese investors.
