Latest Headlines

Mortgage question raised in House

Questions about allegations of mis-selling and corruption relating to mortgages granted to UK citizens for the purchase of property in Cyprus have recently been raised in the UK parliament.

Mortgage question raised in House by David Anderson MP

David Anderson, Member of Parliament for Blaydon recently asked the Secretary of State for Foreign and Commonwealth Affairs, what recent reports he had received of the mis-selling of and corruption related to mortgages for properties for UK citizens buying in Cyprus; and if he will make a statement.

In his reply, David Liddington MP a Minister of State at the Foreign Office, serving as Minister for Europe, wrote:

“Officials in the Foreign and Commonwealth Office regularly brief me on the scale of property problems in Cyprus and the distressing impact it is having on individuals. Most cases of mis-selling relate to purchases that were made between 2005 and 2010. Many purchasers and investors were advised to take out mortgages in Swiss Francs. As the Swiss Franc strengthened the cost of loans rose. Those affected complain that they were not properly advised that interest rates and exchange rates could rise which would affect the cost of their mortgage over time. We are also aware of allegations that lawyers and property professionals were working collectively and against the best interests of foreign buyers.

“The British Government has no authority to intervene in matters concerning Cypriot domestic legislation. However, we continue to work with the Cypriot government to assist in finding resolutions to problems related to property purchases in Cyprus. This has included organising working visits to the UK for staff from the Cypriot Land Registry and the Financial Ombudsman. The High Commission is involved in assisting with public sector reform – specifically with the Ministry of Justice and local government – which will ultimately impact on the way property issues are dealt with.

“Although we cannot intervene in individual cases, we do raise wider property problems by lobbying at high level. Both the Leader of the House of Commons and First Secretary of State, my Rt Hon Friend the Member for Richmond (Yorks) (Mr Hague), and I have raised property issues experienced by British nationals with the Cypriot Foreign Minister, Ioannis Kasoulides. Most recently I raised the subject with Mr Kasoulides on 23 July and Cyprus property mis-selling was raised in the UK Parliament on 22 July. The All Party Parliamentary Group for the Defence of the Interests of British Property Owners in Cyprus also met and discussed the issue on 14 October. Our former and current High Commissioners in Cyprus have regularly raised property issues with the Cypriot Attorney-General and the Finance Minister.

“Our lobbying is having an effect. The Cypriot government has set up a Ministerial Committee to look at addressing property issues. This is a positive step and we are working with the authorities to encourage the committee to take effective action.

“We recognise the significant impact that property disputes has on many families in the UK, some of whom risk losing their life savings. We strongly believe that those affected should continue to pursue their cases through the Cypriot (and if appropriate the UK) courts though we recognise that for many this will be an expensive and protracted route. In parallel we remain committed to lobbying at high level to encourage the Cypriot government to take effective action to resolve existing problems and to reform the property sector to prevent such problems occurring in the future.”

Further reading

Written question 212434: Mr David Anderson 29-10-2014

Those wishing advice/representation concerning their Swiss Franc loan will find a list of organisations that may be able to help at Law Firm Information.

Readers' comments

Comments on this article are no longer being accepted.

  • Tojo says:

    Mike, your first paragraph is very interesting and I would like your thoughts as to whether you think that I was naive or ignorant please.

    I was pre-advised in writing that my mortgage rate was fixed at x% and guess what? I completed and when finally after months of asking I was provided with the mortgage details (agreed to by our solicitor under an unsigned POA), the rate was twice x% and definitely not fixed. I suppose my naivety was in trusting a bank, a solicitor, a developer, a property agency and a firm of UK IFAs to all be honest.

    I guess I was also ignorant in that I expected the land that the developer built my property on to be free of encumbrances and not have a loan said to be over €60m attached to it and for which I am responsible if he defaults.

  • UBoat says:

    Yes naive of them and a hint of you got yourself in to it. It’s not our fault we can’t help.

    It’s just fraud ….. fraud on a grand scale that No one will tackle head on.

    They say Bulls..t baffles brains …. well it certainly dose here. The Cyprus are experts at it……

  • Mike says:

    As much as I sympathise with the plight of those affected and the hardship they face, the report above falls on the mention of “Those affected complain that they were not properly advised that interest rates and exchange rates could rise which would affect the cost of their mortgage over time”. I cannot believe anyone being of an age and in a position to purchase a property could be so naive or ignorant of the most basic of financial facts. Would one need to be advised that interest and exchange rates can rise and fall with the inevitable consequences when they would obviously be aware that their holiday cash conversion alone would highlight the variances in exchange rates from time to time.

    However in saying that I do feel the collusion between developers, agents and lawyers with government remaining impotent and unwilling to change the status quo demands addressing and pursuing through the courts and as expensive and seemingly impossible to achieve, through Cypriot courts as I do not see the UK or EU legislatures being in any position to influence let alone demand changes. The two Petes @ 1:15 & 9:23 have summed it up admirably.

  • Dunn Good says:

    Too late for my wife and I Alpha Bank now have what was left from our house sale and as has been said we cannot afford to appeal the case. The hunting expression is I have heard, ‘Oh look sitting ducks what a bag’. Our loan was in 05 CHF they now want over 3 x on top of what we have paid.

  • stevie R says:

    In a nutshell the UK government and the EU are not prepared to do anything. Because Cyprus is not getting a hand-out from the UK then why should they listen to anything the UK has to say. We are on our own with this lot. Guidelines are being put in place for future mortgage deals but for those of us who are caught in the trap are well and truly stuck with nowhere to turn.

  • Peter Davis says:

    …”This has included organising working visits to the UK for staff from the Cypriot Land Registry and the Financial Ombudsman. The High Commission is involved in assisting with public sector reform – specifically with the Ministry of Justice and local government – which will ultimately impact on the way property issues are dealt with”…..

    Really? You just have to admire the naivety of the British Government. Still at least its a jolly for some overworked member of the public staff.

  • Janine says:

    The Troika should be fining the banks – not rewarding their failures – see fines imposed in the UK below –

    Despite the UK banking system having mostly recovered, whereby homeowners can either keep or sell their homes without loss, malpractice has been rife,(see table below), but this is nothing to what’s been happening at Cypriot banks.

    Reasons for the fines below could easily be applied to Cypriot banks (together with agents/developers/lawyers). This is just a selection of cases from the past few months. UK regulators would have a field day in Cyprus!!

    Troika – if you are reading this – DON’T give them any more money – they are complete charlatans. Instead, take a look at the plight of 1000’s of individuals scammed by the banks (and others), and the 1000’s of court cases the banks are involved with.

    29/10/2014 For failure to manage conflicts of interest. £1,598,000 Individual/small organisation

    28/10/2014 For serious failings in the treatment of mortgage customers facing payment difficulties. £4,135,600 Yorkshire Building Society

    16/09/2014 For failing to act with honesty and integrity and exposing clients to excessive risk of financial loss. £300,000 Individual

    29/08/2014 For failing to act with honesty and integrity £14,474,600 Royal Bank of Scotland

    27/08/2014 For serious failings in their advised mortgage business. £350,000 Individual or small organisation

    16/06/2014 For failing to ensure financial promotions for CSI’s Product were clear, fair and not misleading. £2,398,100 Credit Suisse International

    16/06/2014 For failing to ensure financial promotions distributed by YBS, were clear, fair and not misleading. £1,429,000 Yorkshire Building Society

    23/05/2014 For failing to adequately manage conflicts of interest between itself and its customers £26,033,500 Barclays Bank PLC

    28/04/2014 For not complying with investment limits which are designed to protect consumers by limiting their exposure to risk £18,643,000

    31/03/2014 For posing serious risk to consumers and to the confidence in the financial system.
    £70,000 Individual or small organisation

    27/03/2014 For failing to meet the criteria of fitness and propriety by falsifying documents £7,200 Individual or small organisation

    26/03/2014 For failing to ensure it gave suitable advice to its customers and ensure that it financial promotions and communications with customers were clear fair and not misleading
    £12,377,800 Santander plc

    19/03/2014 For a failure to take reasonable care to establish and maintain effective systems and controls for countering the risks of bribery and corruption £315,000 Individual or small organisation
    30/01/2014 For developing and executing a deliberate and targeted strategy to charge substantial mark-ups that were not agreed with clients or disclosed. (This is typical of Cypriot banks eg: unilateral increases in MARGINS; 14% PENALTY INTEREST – in particular, LAIKI, BANK of CYPRUS) £22,885,000 State Street Bank Europe Ltd;

  • Pete says:

    ” The Cypriot government has set up a Ministerial Committee to look at addressing property issues”

    Get real fella, just more BS from a corrupt and useless government. We don’t need a ministerial committee, we all know what needs to be done, the rest is just more time wasting.

  • The views expressed in readers' comments are not necessarily shared by the Cyprus Property News.

  • Text size

SELECTED REPORTS

Back to top