Investors fear for £60m in savings after student flats scheme collapses

Investors who put tens of thousands of pounds into a £60m student accommodation project in Cardiff have been left fearing for their life savings, after the scheme collapsed.

Savers purchased off-plan units for around £80,000 each in a block of more than 700 student flats. They were supposed to be built in Cardiff ’s East Bay area, close to the city’s docks, in 2019.

Savers were promised an income yield of 8pc but not one brick has been laid after the developers failed to raise sufficient funds to complete the project, Telegraph Money understands.

One 62- year- old NHS worker invested money she inherited from her late mother. Another saver, a 55-yearold from London, invested money she was planning to use to help her daughter on to the property ladder. They said communication about the stalled project ceased following the collapse of the company behind the scheme, Experience Invest, in late 2020. Experience Invest entered into liquidation in December 2020 with almost £ 2m owing to creditors, including almost £1m owed to HM Revenue & Customs.

It was run by Steven Worboys, who was behind a number of failed schemes including a care home project which left investors £1.5m out of pocket. He also attempted an unsuccessful scheme selling “bargain” houses going through foreclosure in US cities such as Detroit during the financial crisis.

“We don’t know where our money is and whether or not we will ever get it back,” one investor said.

A scathing letter to investors from the developers, East Bay Cardiff Limited, a shell company of Experience Invest, appeared to blame investors for the collapse of the project. It accused them of causing bad publicity relating to a string of other failed schemes the firm was involved with. This included three hotel projects in Liverpool operated by developers Elliot Group, which collapsed during the pandemic.

Experience Invest said the firm had become “the target of frustrated investors” who had “orchestrated a premeditated online assault...to destroy its reputation” even though it was the “exclusive sales and marketing agent for these projects”. It added that “although sales had started well, with approximately 100 sales achieved within the first six months, it had proved near impossible to operate under this backdrop”. The letter concluded the development would likely be repossessed by the bank.

Mr Worboys could not be reached for comment. A statement on the Experience Invest website said the company ceased trading in 2020 and said it would not be able to assist customers with their investments.