HUNDREDS of British people who bought properties in Cyprus are hoping that a court case on the island later this month will see their liabilities written off.
They are in dispute with the property developer and Cypriot banks about mortgages taken out to buy homes between 2005 and 2008. The mortgages were in Swiss Francs and their debts and repayments have doubled – mainly due to currency changes.
In the program, Money Box reporter Bob Howard talks to ‘Tim’ who was tempted to buy off-plan in a Cyprus development after he was cold-called by a salesman in 2005.
Tim bought two 2-bedroom apartments in the development that were priced at CYP 109,000 (approximately £120,000) each. The developers recommended a local lawyer to ‘Tim’ who they said knew the Cypriot legal system – but instead of taking out a mortgage in Cypriot Pounds, ‘Tim’ was told that the most affordable option was to take one out in Swiss Francs.
But when the Swiss Franc strengthened against Sterling ‘Tim’, alongside hundreds of other British investors, found himself in trouble. But he only discovered to what extent when, in 2009, he visited Cyprus to see the newly-built apartments.
Last year, after taking further legal advice, he was told to stop making the payments in order to take court action for alleged mis-selling against his Cypriot lawyer and the banks which had lent him the money.
The banks cancelled his loan and have promised legal action of their own. And the money they say Tim owes keeps rising. The banks want an immediate payment of half a million Swiss Francs (approximately £380,000).
Money Box presenter Paul Lewis talks to Neil Heaney (CEO of Judicare) and John Howell (editor of the Overseas Property Professional magazine).
Listen to the Money Box report – Cyprus property troubles: