Plug pulled on In House as values shrank
QUOTED property group In House was put into administration by its lender after the value of its portfolio shrank to £7.7m against loans worth £13.4m.
The company borrowed the money from the Dunfermline Building Society and accumulated 118 buy-to-let properties across the North West.
Insolvency specialists at Ernst & Young’s Glasgow office were appointed on July 28 to a string of In House companies: Decaton, Compustar, Avanti Properties, In House Property Projects and Berrymount Developments.
A report filed at Companies House by Ernst & Young shows management gave the properties a book value of £12.8m but this was downgraded to £7.7m by a valuation shortly before administrators were appointed. The companies owe a further £3.1m to other creditors.
In a statement to shareholders in July managing director Marcus Cassidy said he was told the Dunfermline had moved in because the company had breached its loan-to-value convenant.
“Although we would imagine nearly every property loan in the UK is in a similar position the bank did not wish to listen to any of our valid proposals for correcting the position,” he said.
The most recent figures from In House for the six months to October 31 showed the business made a pre-tax loss of £244,000 on revenue of £7,000. It warned there were material uncertainties that may cast “significant doubt” on the group’s ability to continue as a going concern. In recent months it was seeking to raise extra capital through a flotation on the Plus market.
The Dunfermline is also in administration after collapsing in 2009. At the time business secretary Vince Cable, who was then the Liberal Democrat’s Treasury spokesman, described the building society’s loans to In House as an example of “disastrous management”.
