Royal Institution of Chartered Surveyors: Property Act Receiverships

Alan Campbell Excerpts

Tuesday 18th April 2017 Westminster Hall

[Mr Alan Campbell (Tynemouth) (Lab)]

I commend my hon. Friend the Member for Cardiff Central (Jo Stevens) for securing the debate. I would like to use the brief time available to raise a constituency case, with the permission of my constituent Mr Graham Stewart.

Mr Stewart has been a builder and developer since 2000. He was encouraged by Lloyds bank to move his account to Lloyds in 2003. He banked with Lloyds over the next decade, in which he developed a substantial property portfolio. His accounts were handled both locally and regionally without any great difficulty until they were moved to the Bristol business support unit. His loans were originally reviewed every two years; that period was shortened by the bank, which added a cost for him each time. In June 2012, he was told that his loan depended on his selling a number of his properties, that the valuation would be carried out by the bank’s own valuers and that his repayments would virtually double. When he complained about bullying, he was told at the end of November 2012 that the loan was to be called in and would have to be repaid in full, despite his not being in arrears at the time.

Mr Stewart was told by the Bristol business support unit that Alder King would be brought in to revalue his properties, which would be sold off to repay the loan. I am advised that, as has been alluded to earlier, staff at Alder King and Lloyds BSU moved seamlessly between the two offices. Alder King valued his properties at £1.1 million, despite a recent revaluation by Lloyds valuers at £1.8 million. I am told that the bank was able to access the Government’s enterprise finance guarantee scheme to recover the shortfalls that it had, but Mr Stewart was left with considerable debt. He has been told by local valuers who knew his properties that Alder King had knowingly valued them at a lower value. In their words, he has been sold down the river.

The relationship between Alder King and Lloyds has been the subject of much speculation and investigation, and indeed forensic analysis by my hon. Friend this afternoon. In October 2015, I asked the Serious Fraud Office to add Mr Stewart’s case to its wider investigation, but I was told that the amounts involved did not reach the necessary threshold. In my view and that of others, Mr Stewart and others have been let down by the various agencies and bodies that have been set up to protect their interests. Alder King’s website tells us:

“Alder King is regulated by the Royal Institution of Chartered Surveyors.”

The commercial property section of the RICS website states that

“you can be sure your survey will be carried out to the highest professional standards.”

There have been many other cases, so it is fair to ask why RICS has been so slow and reluctant to respond to this situation.

Another example—I will not go into it in great detail, because a legal case may well be pending—is a family business in my constituency that also banked with Lloyds. The bank appeared to engineer a default; this time, it brought in not Alder King, but PricewaterhouseCoopers. It tried to asset-strip the company to the benefit of the bank, but certainly not of the company or its employees. Not only is PricewaterhouseCoopers regulated by the Royal Institution of Chartered Surveyors, but senior employees have provided offices for RICS’ governing body.

Finally, it is important to point out that we are describing not just a crisis for businesses but a personal crisis for owners, often at cost to their health and their families. They ask, and I ask: if there are rules and procedures for companies regulated by RICS, why do those rules seem to work primarily in the interests of the banks and those acting in their name, rather than those of my hard-working constituents?