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Print PageInside Track, Britain's biggest property investment company has come off the rails and gone into administration. The highly-criticised company made its money by offering off-plan units at "a discount" to largely unsophisticated property investors.
Inside Track was highly vocal in the buy-to-let boom of recent years; taking a large stand at prominent UK property shows and advertising for its property seminars that it claimed would make investors rich.
In a statement it said: "Due to the continuing sustained difficulties arising from the credit crunch Inside Track has been placed into administration." Its forthcoming property seminars have been cancelled.
Investors lured to free workshops paid to learn more
Inside Track enticed potential buy-to-let entrepreneurs to free workshops, where they were then encouraged to sign up for £2,500-plus weekend-long courses.
The hard sell at these "educational" courses offered investors substantial discounts on off-plan new-build property in the UK, in Spain and in Florida.
Those who signed up (often encouraged by claims they should act now or miss out), were then offered membership of a property club run by Inside Track's sister business, Inside Access Properties.
To invest they then had to pay a further fee of up to £10,000 and a subscription.
Inside Track made bold statements, claiming that it aided investors to "crack the 'inner circle' of property investors... the people making deals – and serious money – buying and selling new houses while they're still being built."
Not everyone won over
But, like us at Sq Ft magazine, not all Inside Track customers were won over. A number have threatened to sue the company after losing thousands of pounds on failed investments, and finding themselves in negative equity from over-valued units.
The Inside Track modus operandi pivoted upon rising property values and the easy availability of buy-to-let mortgages. (Plus, of course, a willing audience ready to believe in untold wealth.) But falling resale values on city centre apartments led to lenders reducing BTL mortgages on new-build apartments in 2005.
A constrained market and the ongoing mortgage crunch following on from the US subprime crisis, dislodged the rails from under Inside Track, recorded reducing profits of £12m in 2005, £10.8m in 2006, and £6.9m in 2007.
The collapse of Inside Track is unlikely to effect the sister businesses run under the umbrella of Inside Access. The company has three other arms – mortgage brokers Fuel, property agents Instant Access Properties and a management/support wing AfterCare Solutions.