The Great British Property Scam (Part 6)
However, what really started the fire began back in 2004.
On Friday May 7th, 2004 Country Life magazine reported that a new hotel in Notting Hill was to offer guests the opportunity to save on hotel bills when staying in London, as well as a good rate of return on a new kind of investment.
Guesthouse West was described as “a brand new venture aiming to be a luxurious modern hotel providing a quiet atmosphere for people staying there, as well as good accessibility to all the attractions the capital has to offer…..The hotel is also an investment opportunity for businessmen or companies who are looking to save on hotel costs for those staying the night as well as a return on investment.”
A totally new concept was born and anyone with sufficient cash could buy into it. Rooms in the hotel were for sale on a 99-year lease at prices which started at £235,000. Investors would get “up to” a 7% return on their investment by allowing the hotel to let the room out for them.
With hotel room prices in London always coming at a premium this may have been an attractive proposition for some. Particularly with GuestInvest`s high profile advertising campaign promising investors that they could; “Earn money while others sleep.”
Unfortunately, as was seen with Lehman Brothers, all good things come to an end and by 2008 the headlines were very different. On Friday October 3rd it was announced that the company that introduced the concept of “buy-to-let” hotel rooms had fallen into administration. But not before leaving its mark across London and the investment sector.