An estate agent selling homes off-plan in a new development has had complaints about its marketing upheld by the advertising watchdog.
CBRE had promoted the Crown Place development in London EC2 with a ‘rental factsheet’ giving estimated rental values and estimated average gross yields.
These gave various ranges depending on the property type and size – for example, 3.9% to 4.9%.
The complainant did not believe that the yields quoted were representative of the local postcode, and challenged whether they could be substantiated.
The complainant also challenged whether the advertisement was in breach because it did not make clear how the yields had been calculated.
CBRE told the Advertising Standards Authority that it was confident that it had given correct rental values and gross yields.
It had researched the local market, but because One Crown Place was still in construction it had used comparables from another tower block, The Heron, in the EC2 area.
CBRE produced reports from LonRes and also Best Price Guide reports from Rightmove to back its arguments.
CBRE also said it had not included details as to how it had worked out rental yields in the advertisement because it believed that the likely target audience was experienced rental investors.
However, the ASA upheld both complaints.
It said that CBRE would need to demonstrate that its quoted figures were achievable and representative of the market in the local postcode area.
The ASA also said that the LonRes reports on rental prices achieved in The Heron were limited in scope, for example not containing information about three-bedroom duplex units.
The Rightmove Best Price Guides gave information about properties in The Heron, but also properties elsewhere, including outside the EC2 postcode. They also gave asking prices, rather than prices achieved.
The ASA also upheld the complaint that CBRE had not given the basis for its calculations, and had breached the Committee of Advertising Practice Code.