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A previously stalled housing development on the edge of the city’s university campus looks set to be finished during the next 12-months.
170 investors have come together to save the former Printworks Preston block from becoming a white elephant and £10million disappearing into the ether.
The purpose-built student accommodation, made up of studio apartments, was being built by The Ladson Group but after they fell into financial trouble the investors of the flats rallied together to buy out the block.
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Creating a GoFundMe the newly formed group have been locked in legal and financial battles to wrestle control of the future of Sizer Court as it is now known.
Alex Enache, 27, is one of the directors of the new management company formed to complete the building work.
He told Blog Preston: “We have a very diverse background of people who have all ended up in this situation, and unfortunately it’s becoming more and more common.
“These flats are marketed as having a guarantee return and investment, but it’s not regulated, and so as happened here you end up with the risk of these flats never being completed.
“We took action and as a group, we were lucky we were able to have the skills, people and background to deal with this, we have moved to secure the apartments and we’re now working to get it finished.”
Mr Enache said he and his fellow investors were promised a 10 to 15 per cent return but it soon became clear they were never going to see this if the flats were not built.
Two separate buildings, dubbed Printworks Preston, were granted planning permission back in 2017 off Sizer Street close to Moor Lane. The site was previously a biscuit factory.
Work began in earnest in 2020 but Mr Enache says they were told the coronavirus pandemic had driven a hole through the Ladson Group’s financial projections and a charge levied on one of the group’s other companies started a domino effect to land the Ladson Preston Group – who were behind the Printworks site – into receivership.
Mr Enache and his fellow committee members acted quickly to stop the land and property being sold at auction.
They raised enough money to be able to buy the development and are now working to complete the apartments.
Each flat, which has restrictions meaning it can only be used for student-focused studio letting, is worth around £55,000-£70,000.
Mr Enache said: “People have already lost money, we’ve each had to spend four to five figure sums to get to this stage.
“But it is worth it as we will have something to show for it at the end. Otherwise we would have no flats or apartment to then be able to sell or rent out.”
He said one of the investors, an 85-year-old woman, had potentially lost her life savings in the scheme but may now get this back due to the group’s actions. She had bought the flats to be able to pass onto her grandchildren after wanting something to invest her money into.
Mr Enache, who works in marketing and communications, said: “There was a lot of anger and emotion at the start, but personally I think Mr Ladson got himself into a difficult situation and he has been helpful to us – for example by agreeing to sell the Preston firm to us so we could take control of the development ourselves.
“I do think this practice needs looking into, as obviously developers and people offer you it all on a plate and then you find our money is gone – because it’s not regulated.”
Mr Enache said he had fallen foul of previous schemes, in Liverpool in particular, where developers had sold off plan and disappeared with tens of thousands of pounds. The schemes are known as PBSA (purpose built student accommodation) which restricts the usage for student-lets only.
In recent years many developers have been applying to convert the use of many recently built apartment blocks so they can be rented to ‘key workers’ or ‘professionals’ due to the lack of investment in the student accommodation market.
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‘We bought this to bridge the WASPI pension gap’
A semi-retired couple from Cottam were two of the investors caught up in the Printworks Preston investment trap.
Neil and Pam, 62 and 66, had decided to use some of their savings to buy one of the studios with the aim of giving some rental income to bridge the two-year gap in Pam receiving her state pension – she is one of the well-documented ‘WASPI women’ – caught out by the government’s change in retirement age.
Neil told Blog Preston: “We thought it was a safe bet really, because of all the building work happening so close to UCLan and how quickly other schemes were going up. And with how the university has expanded then it felt like it would give the income needed from summer 2021.
“It has become a stressful process and I don’t think we’d ever buy off-plan again.
“Looking back now and I think we were drawn in too much by the promise of a nine-per-cent guaranteed rental income and we could have some more due dilligence.
“We’ve been lucky that this group has formed, led by Alex, Anna and Tom and they’ve known what to do. Otherwise, yeah, I think we’d probably have only got maybe ten grand or so of our fifty grand back.
“We are fortunate it hasn’t affected us too much in terms of our decisions but I guess we’ve not done some things during the past few years we would have done otherwise if we had of received the income we expected.
“It’s just a real shame as you go into there and it’s going to be top notch accommodation, but this Ladson he’s just not managed it right and it’s fallen apart. He was giving every excuse under the sun during the updates and last summer it was clear the things was dead in the water.
“We were angry at first but now I guess we just have to accept it. And yeah, we definitely wouldn’t be investing like this again.
“And at the end of the day, we’re lucky really, a number of those who invested have passed away since this dispute started.”
Blog Preston contacted the Ladson Group but received no response by time of publication.
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