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Remember the suspect property “clubs” that promised to help you buy flats without stumping up a penny? The phenomenon goes back to 2005 and 2006 and here’s how it worked. You would buy a flat marketed at £200,000 through the “club”. In fact, the price was discounted to £180,000. You would use the surveyors and solicitors and mortgage brokers recommended by the club. And you would apply for a £180,000 mortgage. Somehow, though, the lender never knew about the discount. It advanced £180,000 on the understanding that you had put in a deposit of £20,000. Today similar-sounding offers are doing the rounds again, with promises to help investors buy “no money down”. Don’t do it. No reputable lender will advance 100pc of a property’s value. At worst, entering such a deal could make you party to mortgage fraud.
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