Advertising watchdogs have banned an as by a property company claiming to sell student flats at 25% below market value with ‘no deposit’ 100% finance.
The Advertising Standards Authority (ASA) upheld a complaint that the firm, BMV Property Direct, of Sheffield, sent misleading emails to prospective buyers.
The firm claimed ‘luxurious’ one-bedroomed £100,000 student flats in Sheffield were on the market for £75,000 and came with 100% finance.
The ASA looked in to the claims and discovered the flats had sold for £100,000 in 2008, but when the email was sent in September 2011, the prices were significantly less.
The 100% funding claim was based on replacing the deposit with a short-term bridging loan which was not properly explained by the firm, explained the ASA.
The ASA ruled the email breached several clauses of the advertising code and must not be sent out again.
The firm told the ASA made several explanations to the ASA:
• "No deposit required" meant no deposit was taken to secure or reserve properties and that a bridging company provided 100% financing.
• "100% finance available" referred to short-term bridging loans of up to 100% subject to status and lender
• "Market valuation £100,000" was an estimated market valuation based on recent Land Registry entries and did not imply this was a professional valuation
“We considered that the ad text "No deposit required" did not make sufficiently clear to consumers the financial arrangement into which they would potentially enter if they purchased a property,” said the ASA adjudication.
“The use of an estimated market value figure in the ad, when used together with the text "Fantastic 25% Discount. Instant Equity of £25,000" was misleading, and the reference to a current market value of £100,000 in the ad was unsubstantiated.”
BMV Property Direct’s web site claims the firm is the UK’s premier provider of genuine below market value properties and takes pride in ‘transparency’.
