Where do I stand? Bought Off Plan Last Year. Due Completion in 1 Year

scaseman

Hi Guys,

I bought an apartment in my local area last year, which is part of a major regeneration of the town centre) and it is due for completion this time next year.

Myself and a number of others had to put down 10% (£15K) of the price as the deposit in Nov of 2007 but now I'm concerned that the apartment wont be worth the value I signed up for when it comes to Oct 2009.

At the moment no one has the the mortgage setup for the other 90% (as it's a year away) so I was just wondering what my options are.

What if the banks wont lend me the other 90% of the Nov 2007 value? (£150k)

What chance have I got in getting any of my deposit back or a reduction in the sale price?

Thanks for any advice

maninthestreet

Have you actually exchanged contracts with the Developer for this property? The fact you have paid a £15,000 deposit suggests you may well have done.

Richard_Webster

I keep making this point.

Did your solicitor warn you about the risks of exchanging with no mortgage offer in place that would cover the period when the transaction was likely to be completed?

Certainly by Nov 2007, with the Northern Rock business, the first signs of a house price slump were there for all to see. I would have made the point quite forcibly to any client that reliance on continual house/flat price increases was very risky. Even if there were no signs of a slump it was always theoretically possible that a problem could arise and your solicitor should have pointed out the risk factors involved. Did he?

Trollfever

Caveat Emptor.

Premier_2

scaseman wrote:

...What chance have I got in getting any of my deposit back or a reduction in the sale price?...

About the same chance, had prices gone up, that the developer could have successfully asked you for more money at completion than the agreed sale price.

If you can't raise the funds, speak to your legal advisor that you hopefully consulted prior to committing to the purchase in the first instance to see if you can sell your interest in the property to someone else for whatever price you can ... and start saving quick to cover the expected shortfall.

geoffky

you gambled you lost.....start saving like mad.. you will probably just lose your deposit if you are very very lucky

scaseman

If I dont have a mortgage, how could I lose more than my Deposit?

monkeymaster

scaseman wrote: »

If I dont have a mortgage, how could I lose more than my Deposit?

If you entered into a contract to buy it and pull out, should they sell it for less than you agreed to buy it for I believe they're entitled to take legal action against you to recover the difference. Check with a solicitor.

barnaby-bear

scaseman wrote: »

If I dont have a mortgage, how could I lose more than my Deposit?

Like negative equity if they can only sell it to someone else for £120k (they could have sold the flat to someone who could complete instead of you so won't want to be 30k down) you'll still owe them the difference like people who are repossesd do. I don't know if bankrupcy can wipe out the debt. Personal loan or borrow any deficit off family?

GDB2222

Sadly, Scaseman, what the monkey and the bear have said is correct. You contracted to buy this flat, so you're liable for any loss the builders suffer if you don't complete. Some city centre flats are down 50% in value since 2007. Assuming you won't be able to get a mortgage, you have a major problem. Depending upon your finances, you should seriously consider personal bankruptcy. The sooner you start, the sooner you'll be discharged.