Negative Equity Apartment Handed Back In Larnaca
30 November 2022 • 2 min read • by Tom Miskelly
Our client approached us for help to resolve his Cyprus property mortgage problem after buying a property from a well-known Cypriot lender
Following a rare discount offered by the Bank, the outstanding mortgage was £150,000. However, the property was in severe negative equity. It was valued at a mere £50,000. This meant even with the discount, he faced a shortfall of £100,000.
He was failing to meet monthly payments due to low rental income. Consequently, he was falling into arrears, with fees and charges being added.
He was also concerned about the security of his assets in the United Kingdom, which included multiple buy-to-let properties.
What was at risk?
- This client owned 15 buy-to-let properties in the UK that provided him with his livelihood.
- If he defaulted on the mortgage, these would have all been at risk as a result of legal action.
What we did
- The case was difficult to finalise as it proved difficult to find a potential purchaser for the property. This was despite its low value and marketed price. Nonetheless, EU Property Solutions managed to secure the sale of the property.
- This then allowed us to negotiate directly with the bank on the remaining shortfall.
- The client handed back the property to the Bank and we agreed to a settlement of £13,000 paid by our client to close the mortgage account on a Full and final basis.
- Our client avoided high sales costs associated with Cyprus property transactions.
- Our client’s 15 UK properties were protected.
The state of the property market in Cyprus made this a challenging case to get across the line. There is still a large amount of negative equity properties in the country. Thanks to our team’s knowledge of the local market and our experience dealing with Cypriot banks, we managed to secure a settlement.
The client felt like a weight had been lifted off his shoulders and was overjoyed when we told him the news that our offer had been accepted.
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