James Crosby, the man who bailed out as Chief Executive of HBOS in 2006 – two years before the crash – seems to be about to bail out of the Edinburgh property market too, although on this occasion his timing does not look so fortuitous.
Sir James got his comeuppance a few years after leaving the bank. In HUBRIS I detail the allegations about his role in the collapse of HBOS forcing him to step down as deputy chairman of the Financial Services Authority (FSA).
He had jointly bought the penthouse flat at 56/5 Thistle Street – above the fish restaurant Fishers in the City – with Halifax, his then employer, in June 2001. The merger with Bank of Scotland had been discussed at that point, but not yet agreed. Crosby must either have been confident, or believed he had to be seen more in the Scottish capital to get the deal over the line.
The buying price was £496,000. In September 2007, the year after he left HBOS, Crosby and his wife paid £337,500 to buy out HBOS and take full ownership of the flat. The deal attracted criticism at the time, because it put a value of £675,000 on the property – a third higher than the original purchase price, but below what some professionals thought should have been a fair market value.
At the time, The Scotsman reported estate agents Rettie as saying that prices rose by 104% between 2001-2007. That would have put the market value of the apartment at more than £1.1 million.
If that was true, Sir James should have flipped the flat immediately and pocketed a near 100% pre tax profit, but he held on to it. Now it is on the market, being offered by estate agents Strutt & Parker with a guide price of £625,000. Described as “A stunning 3-bedroom city centre apartment with exceptional views” the property has, three bathrooms, kitchen/diner and large reception room, plus a mezzanine study, although the style and décor are more airport lounge than Georgian elegance.
Edinburgh prices are off their peak, but exceptional properties are still fetching over the asking price. You never know, perhaps he’ll be lucky.
