£320m LOSS! Surely the worst property deal in history
The Property Nomads Podcast · Rob Smallbone & Aaron Devoy
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Show Notes
Rob discusses what he considers to be one of the worst property deals in history involving Birmingham City Council. The council is facing a loss of 300 million pounds after selling off 755 properties from the athletes' village built for the 2022 Commonwealth Games. Rob examines the lack of foresight and planning by the council, highlighting the high loan-to-value ratio and the failure to consider alternative strategies.
KEY TAKEAWAYS
- Birmingham City Council is facing a significant loss of 300 million pounds by selling off 755 properties from the athletes' village homes built for the 2022 Commonwealth Games.
- The council's lack of foresight and failure to have a backup plan has led to this disastrous property deal, resulting in a burden on taxpayers.
- The council borrowed a significant amount, with a loan-to-value ratio of about 85-90%, which is uncommon in private property investment.
- Despite retaining 213 newly built homes, the decision to sell off 755 properties seems illogical and detrimental to the community.
- The council's reasoning of a lack of market appetite in the area where the properties are located raises questions about their decision-making process.
BEST MOMENTS
"Birmingham hosted the 2022 Commonwealth Games and as with most sporting events they're very prestigious but they don't actually necessarily do the economy in the grand scheme of things."
"Local MPs have come out and said that it's, and I quote, an absolute scandal, end quote, and that the Labour-led authority had agreed last week, or a little while ago, to sell more than 700 homes to a private company, and that's resulted in a £300 million loss."
"Taxpayer funds have been used to build some infrastructure in order to host the Commonwealth Games. They have now been hosted. And as a result of that, people of Birmingham are left with this white elephant of a project."
"So they're selling off 755 properties to a private bidder, bidder's yet to be named, that's going to result in significant loss to the public purse."
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