Sadly the last few years have seen increasing numbers of consumers putting their self-invested personal pensions (SIPPs) or savings into overseas property investment schemes. From hotel developments to holiday lodges in exotic locations, there’s a huge range of tempting opportunities out there all promising low risks and high returns.
Unfortunately, in our experience the majority of these unregulated schemes do not live up to expectations and in many cases investors see their hard-earned funds diminished by spiralling costs and agents commissions. We’ve seen examples of overseas properties failing to be built on time, running over budget and not achieving their advertised rental yields or projected capital values, all sadly leaving investors out of pocket.
Not only that, but investments in overseas property can come with currency risks, tax complications and problems with language barriers causing huge stress to the investors who put their faith in the financial advisors selling these seemingly great opportunities.
Recent examples of overseas property schemes where investors have lost out include The Resort Group and Harlequin.
Unsuitable investments and untrustworthy advice
The Financial Conduct Authority (FCA) has stated that high risk, unregulated investments like these are unlikely to be advisable for most ordinary people looking to invest their pension funds. Infact, they recently issued a warning to advisors who recommend schemes like these to their clients without fully assessing or communicating the advantages and disadvantages of such investments.
Often these advisors (many of whom themselves are unregulated) are encouraged by high commissions to sell overseas property investment schemes to their customers, regardless of their suitability and security – or lack of in most cases.
They may also pressure their clients into taking up deals quickly by telling them it will only be available for a limited period or that there are only a few places remaining. People are left with little time to do their own research so, not wanting to miss out on a good deal, they sign up without knowing the full facts. Sadly, in many cases the consequences are devastating and result in huge losses.
Realising you’ve been pressured into making a bad investment with your hard-earned money is overwhelming and incredibly stressful. Our friendly team are very experienced in such matters and will do everything they can to help you. If you’ve lost money to an overseas property investment scheme, all you need to do is call 0800 193 1234 or use our online contact form to arrange a no-obligation chat.