In the summer of 2023, the residents of Wollaston, a small village on the fringes of Stourbridge, crammed into their local pub for an emergency meeting. The mood was one of massive worry. A retirement home in their sleepy neighbourhood had been purchased by an upstart Mancunian property company called HSPG, who wanted to turn it into a large 23-bed HMO. The local residents wanted to stop that from happening.
On the surface of things it was a fairly common scene, the sort that plays out every week up and down the country. Residents angry at a local development, petitions being signed in haste, the works — nothing especially unusual. In the end their efforts were successful — Dudley Council intervened and HSPG’s plans were rejected.
To a neutral observer, it might have looked like poor HSPG had been left holding the bag. Not only had they paid £1.27 million for the building, twice the £650,000 paid for the property only months prior, but their plans for it had been shot down. It might have looked that way, anyway, but then HSPG got lucky. In January 2024, they managed to strike a deal to sell the retirement home…for £1.9 million.
To be clear — the property had somehow risen in value from £625,000 to £1.9 million, a 192% markup. Astonishing though that increase might seem, HSPG has form for transactions like these. Founded in 2015, the company has made cumulative profits of nearly £50 million over the last few years. Although its focus appears to be changing, to begin with it used to focus on the murky world of exempt accommodation.
Last year our Manchester-based sister publication The Mill described one way that HSPG has amassed those profits: it tripled its money on one property in a single day, buying a semi-detached house in a depressed part of Manchester for £575,000 and then selling for £1.8 million to a private investment fund less than 24 hours later. Manchester City Council later described this deal as “market manipulation” — but more on how it worked later.
Two things differentiate these Manchester and Wollaston examples. In good news, the time frame in Wollaston was less egregious: compared with less than 24 hours in Manchester, it took a full two years (2022-24) before someone paid £1.9 million for a property that started out at £650,000. The not-so-good news in Wollaston is that the final buyer who paid £1.3 million more than the starting price was not a private investment fund, but Dudley Metropolitan Borough Council.
Before publication, The Dispatch put a series of questions to Dudley council, who explained that the funds use to purchase the retirement home came from “Right to Buy receipts which are funds gained from the sale of council homes,” and that this money was “ringfenced for building or acquiring new homes to replace those sold and, if not spent within a certain time period, must be returned to the Government”. Moreover, they told us they had received an independent valuation “undertaken by industry experts” which led them to believe they were paying a fair price. Meanwhile, a series of questions sent by The Dispatch to HSPG — who, to be clear, have done nothing illegal — have gone unanswered.
