HUNDREDS, if not thousands, of UK buyers – many from the North-East and North Yorkshire – are facing legal action by a Cyprus bank after their hopes of buying a Mediterranean holiday or retirement home turned sour.
But how has it come to this? Many of the investors who bought a property in Cyprus were not wealthy or looking for a get-rich-quick scheme. They were ordinary people. Some had come into money from redundancy or a pension pay-out. Others had saved all their life and were looking for a secure investment for their retirement.
They took advice from someone they trusted, someone who knew their financial circumstances – their financial advisor.
For some, that person was Stokesley-based Andrew Laird, from Roseberry Financial Solutions.
Mr Laird asked if they had considered buying an off-plan villa in Cyprus. Buyers said he offered a “one-stop shop” to help with the purchase.
Glossy DVDs of developments by builder Alpha Panareti were provided. The architects’ images looked impressive. The villas came with swimming pools and magnificent views of the sea.
The properties weren’t cheap but buyers claimed Mr Laird told them the mortgage could easily be covered by renting the homes out to holidaymakers.
Buyers were told the mortgage would be with a Cypriot-based Alpha Bank, but would be in Swiss Francs because the currency was stable.
Investors say they never saw details of the mortgage and were never explained the risks.
The buyers signed a power of attorney which gave Cypriot lawyers the ability to sign on their behalf.
For a period of time, all seemed good. The buyers assumed work was progressing on their properties. However, they then began receiving statements from Alpha Bank showing their mortgages were being drawn down by the developer, despite little work on their properties being completed.
As the global recession began to bite, the value of the Swiss Franc began to increase, sending mortgage repayments rocketing. The Cypriot bank increased the pain by pushing up its own interest rates on the loans. At the same time, property prices were plummeting.
All the while, the developer continued to draw down on the buyers’ mortgages, while the bank failed to check how much work on the villas had been completed.
Many buyers were told their properties would be completed in 2008 or 2009, but deadlines came and went. The mortgages repayment kept increasing as interest was added and still the properties were not completed – buyers point out that the developer was already receiving its money from their mortgages so what incentive did it have to complete quickly?
Some properties were completed on time, but mortgage repayments had already doubled.
Buyers could not rent their properties out because they were not complete – and for those whose homes were complete, rents were a fraction of those promised.
Many buyers tried to obtain their property’s deeds – but found out they would only receive them when the whole development was complete.
It also emerged that the developer had taken its own mortgage out on the land – meaning buyers could only get their title deeds when that had been paid off.
Finally, for many the payments were too much and they defaulted.
Nigel Howarth, from Cyprus Property News, described the situation as a “catalogue of catastrophes.”
Andrew Laird later set up Roseberry Overseas Properties UK, which formed a network of agencies around the country selling villas in Cyprus and many hundreds of people are thought to be affected. Buyers who have not kept up with their mortgage payments are now being issued with writs by Alpha Bank, meaning they could lose their UK homes.
However, many are fighting back, launching their own legal action in the High Court against Alpha Panareti, Alpha Bank, Mr Laird and others.
Complaints have also been made to official bodies including Cleveland Police, North Yorkshire Police, the Financial Services Authority and Trading Standards.
The Northern Echo contacted Alpha Panareti and Alpha Bank to respond to buyers’ criticisms, however both failed to respond.
Mr Laird said he was one of 70 defendants named in proceedings regarding the case at the Royal Courts of Justice in London.
He said his solicitor had applied to court to strike out the claims against him, but pending that hearing he could not make further comment.
Cyprus property victim at risk of losing everything
KEN Graham has already paid out £60,000 in deposits and legal fees, but he is at risk of losing much more.
In 2004, the 50-year-old’s wife, Jacqui, died of cancer.
The following year, he was discussing potential investments for the life insurance policy with financial advisor Andrew Laird when the subject of Cyprus came up.
Mr Graham, from Kirklevington, near Yarm, said he wanted to use the money in a way which benefit their three children and create something they could always associate with their mother.
After being shown a picture of a beautiful detached villa, he eventually agreed to make the investment.
Mr Graham said the advisor never mentioned risks, describing the scheme as fail-safe. He could cover the mortgage by renting the property out and even sell it back for a profit if he wanted.
In 2009, Mr Graham then received a picture of his villa being built showing it was now semi-detached. He immediately contacted Mr Laird who told him it was not his problem and he should contact the developer, Alpha Panareti.
As the developer had broken the contract by changing the villa, Mr Graham tried to walk away, but was told he couldn’t. It was then that he discovered the developer had already taken much of his mortgage for a property that was due to be completed in September 2009, but is now scheduled to be finished in 2013.
Despite paying a large deposit, Mr Graham still owes around £500,000 on a property he bought for £300,000.
He is now waiting for the Cypriot bank to issue a writ which could mean he loses his family home.
Asked how he now felt about Mr Laird, he said: “I feel as if he has rubbed the death of my wife in my face.
“I want him to know what it’s like to face losing everything.”
This is a ‘much-read-report-elsewhere’ type report – and most interestingly the investor identified is an ordinary man, innocent, trust-everybody type of person falling into the trap of some liar, tricky person residing in a far-off place and the property lies some several miles off the place of Investor. What is most striking feature in all or most cases the investor fail to engage a Lawyer from his side to study all the relevant documents submitted by the cheating Agent. Very sad in hearing such an incident of cheating an honest, innocent investor. But I find similar property agent in my place – a town on Eastern part of India. These Agents may differ in physical terms but nature is same..
‘Swissgate’ so many effected, so little action by those who should be working to protect us financially from this plague of mis-selling effecting thousands of honest hard working Brits.
The numbers involved speak for themselves!
It sounds like many purchasers have solid legal cases. Yet there seems to be very little in the way of results.
Does Cyprus not understand? We are not going away, these issues will not go away. They can never be a modern country with a functioning economy unless they resolve these problems. Simple.
As an expat in Cyprus I did buy a property off plan with Alpha Panareti and Alpha bank in Japenese yen.
At the time the ROI was 2.25% and the mortgage was based on a term of 7 years only. The house was completed on time with many additional extras added to the property at no extra charge. After nearly 4 years we decided to move thus sold our property.
AP did not charge us any commission from the sale which is within their rights, like others have done and the mortgage was over 50% paid off. To that end what AP offered prior to 2008 is certainly different to what is happening now. Maybe I was one of the lucky ones.
I know many friends who have lost pensions etc after the 2008 Financial meltdown and myself included but who can we get to pay these back? Fingers crossed that a suitable resolution for all can be achieved among all parties.
Hi Mark, did you come to some kind of arrangement with the bank or restructure the loans. Not sure how to contact you through this site or if that is possible. I just need to speak to people in the same situation to see what my options are? Thx
I fear for everyone who are involved at the wrong end of the Cypriot property market. My fear is that ultimately loans were taken out and the Banks will want there money back and I don’t see a way of stopping them. I have been to the brink trying to sort out my 2 properties and hopefully my nightmare will end soon at great financial cost, but rather that than years trying to fight a battle that I only have myself to blame for. The end result would be far worse if I allowed them to seize my assets in the UK!
A distressing experience indeed!
The devil, as usual, is in the detail and we don’t have any of that – the power of attorney, the sale/purchase agreement, the mortgage agreement and so on. Most of these sales people, Cypriot lawyers and bankers are professionals and will have produced legally watertight documents. Whether an English court’s sympathy can change that remains to be seen.
Choosing a Swiss franc mortgage because it is a stable currency makes no sense. Most people actually choose the Swiss franc option because it carries a lower interest rate and ignore the currency risk, which is financial suicide considering the post world war two decline of the British pound against the majority of other currencies, including the Euro and the Swiss Franc.
However, the power of attorney is a potential way out. A power of attorney for a Cypriot lawyer to sign an agreement with Cyprus jurisdiction, requires the clients to be physically present in Cyprus in front of a Certifying Officer when the power of attorney is signed. If this was not the case, for example if the client can prove he or she was not even in the country on the recorded date of the signing, then the power of attorney is invalid along with any agreements or contracts signed under its powers. The clients then should be demanding back any money they have paid to Alpha Bank or the developer or the estate agent.
The telling thing is that the more stories like the plight of the Alpha Panareti / Alpha Bank victims is highlighted, more and more people are coming forward to state, as we see here, that they are in the same or similar situation, it speaks volumes as to the corruption endemic in the property industry in Cyprus.
Interestingly, other web sites seem to have appeared on the scene recently, “bigging up” the Cyprus property situation and inferring that it’s not all bad, however, the silence from the so called good and reputable developers, is deafening, as is the silence from the Cyprus government.
The situation is dire and sure to get worse.
For anyone caught up in this nightmare there is a protest on Thursday next week outside the Alpha Bank premises in Cannon St London.
Please feel free to join us if you are able and meet up with other victims.
I note that the original article appeared in one of News Quest Specialist Media’s publications, who specialise in risk titles such as Strategic Risk. While the news of the legal action against Alpha Panareti and Alpha Bank (and the UK High Court’s ruling that the action can be heard in UK rather than Cyprus) is a few months old, it is a good sign that serious mags aimed at professional, business and investment readers are now also aware of at least one example of the problem. Nigel, it might be worth alerting the editor of Strategic Risk to your site as a means of them tracking the overall problem and issues relating to the Cyprus Property Scandal. I have his name and e-mail address if you need them.
Chris, Pat, Richard, Joanne & Mick – I have sent you contact details as requested.
If anyone else would like the contact details of the Facebook groups and those legal action in the courts can they please get in touch via my Contact Page.
Thank you
If these sales contracts are found to be riddled with lies (ie; covert developer loans etc, ad nauseum.)and the Buyers have deemed to have been lied to / mislead, by such as this sales agent ( mentioned in this report. Anything in writing or e: transcripts?)
Then surely, they should be deemed to be null & void and the buyers to be compensated.
I assume that the legal teams are checking these factors out?
On hindsight, I would not touch any property outside of Britain or the like, with a barge pole! R.B.
Please let me have the details. I was told I would’nt have to pay anything until my villa was ready but now the bank is sending me demands.
Dear Nigel
I’d like the details too please
Please send me the contact details.
Thank you
Me too Nigel
Can you send me the details as well please Nigel.
Thank you.
I’m sorry but Cypriot Village summary justice would need to be applied to this individual but slowly. As in UK not much will happen to him and he will have years of comfortable enjoyment of the rewards from other peoples misery.
Sadly I do however question the faith and belief in a stranger selling an unknown quantity together with the apparent lack of research. Renting to holidaymakers is illegal for a start without the necessary permits.
My sympathies go to all those affected, let us hope and prey their action nails the crooks to the wall and exposes the administration loud and clear again.
@Jonathan – I have emailed you all the details. (I removed your email address from your comment to prevent spammers).
Dear Mr Howarth
I am another victim can you please send me the details of the facebook groups and those taking legal action.
My email address is
Thanks for your help.
Kind regards,
Jon Hutton
@Michael – I’m sorry to hear that you have been caught up in this.
I have emailed you links to two Facebook groups and also contact details for the various groups taking legal action in the courts.
I have been caught in this. I bought a flat that was supposed to be finished two years ago and my mortgage has more than doubled and I’m disgusted at the way I have been treated noone is telling me the truth.
I see that people have complained to the Police and that legal action has been started.
Can you let me have details please.
Thank you
How many nails can you actually nail into a coffin?
Despite this latest expose of out and out criminality, the Cypriot government, the ultimate regulator, does nothing. And it never will because of the incestuous links between it, developers, lawyers and banks.
And there are still those who are talking up the market and brushing all this aside. Furthermore, property fairs in the U.K. and elsewhere are still taking place with people doubtless being duped by these charlatans.
Anyone still contemplating having anything to do with the Cypriot property market needs to be sectioned. It’s simply not worth it.