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cashinmattress

Buyers Face Bankruptcy In Off-plan Timebomb

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A first-time buyer who exchanged on a two-bedroom flat in one London development, and is due to complete later this year, estimates he will be £150,000 short. An accountant, he fears being struck off if he is sued and made bankrupt. The man, who asked to remain anonymous, said: 'I can't sleep. I'm worried I could lose my career and my life will fall apart.'

Boo hoo hoo!

Pagliacci_Original_Score_Cover.jpg

Ha ha ha!

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If they cannot find the money to complete they are in default on their contract. They forfeit their deposit and face being sued for damages.

Damages can total the difference between the reduced price the developer has got for the property and the original agreed price.

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The [accountant] has paid a 15% deposit on a property he exchanged on for £500,000. But it is now valued at £400,000 and he can only borrow 70%. He added: 'I owe £425,000 but I can only get hold of £280,000. It's a nightmare.'

That's a bitch, but he should really have got an iron-clad mortgage offer before signing the contract. He tried to swim nekkid and now the tide has gone and it's all hanging out. :lol:

Ah well, when he's bankrupt and jobless I guess he'll be out of the housing market which will depress prices a little more; all grist to the mill. ;)

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couldn't happen to a more deserving bunch of people. If they were trying to 'flip' and make a killing at another's expense, I have very little sympathy - particularly as he is an accountant and was spending a ludicrous half a million on a property which was not worth it in the first place. :P

editted to add a little sympathy as he is allegedly an FTB (with 500K to spend?) and not a BTL

Edited by olliegog

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Guest DissipatedYouthIsValuable

I think it's very naughty of the future to play tricks on that nice man like that.

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The man has paid a 15% deposit on a property he exchanged on for £500,000. But it is now valued at £400,000 and he can only borrow 70%. He added: 'I owe £425,000 but I can only get hold of £280,000. It's a nightmare.'

Half a million quid for a 1 bedroom flat and he's a first time buyer!!!!!!! Hardly a typical first time buyer.

No sympathy.

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I don't have a lot of sympathy for anyone stupid enough to have got themselves in this position, but surely their only option is simply to write to the developer explaining that they will not be in a position to complete due to the change in circumstances, making it clear that they have no assets and will simply go bankrupt if any legal action is taken for breach of contract.

It is very unlikely that the developer will go to the expense of taking any further action at all. They don't know that bankruptcy would be a career ending catastrophe; for most people it has no effect whatsoever.

My experience is that as soon as you mention bankruptcy most creditors just go away.

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couldn't happen to a more deserving bunch of people. If they were trying to 'flip' and make a killing at another's expense, I have very little sympathy - particularly as he is an accountant and was spending a ludicrous half a million on a property which was not worth it in the first place. :P

editted to add a little sympathy as he is allegedly an FTB (with 500K to spend?) and not a BTL

The guy is a d!ck clearly.

But your comments on accountants being 'a more desrving bunch of people' make you a d!ck or more to the point a jealous d!ick. The politics of envy.

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Alot of people in my 2 former work places are going to be stung by this they bought at the peak ie 2007/08 have cripplingly high mortgages , and are accountants or lawyers , they don't have the option of going bankrupt!.

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Link.

Boo hoo hoo!

Pagliacci_Original_Score_Cover.jpg

Ha ha ha!

Why are these twonks always accountants? Just this week the government said it wanted to shorten the time it takes to become a teacher to gets accountants and bankers into the classroom to teach maths. That's like getting Geoff Capes in to teach ballet.

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The guy is a d!ck clearly.

But your comments on accountants being 'a more desrving bunch of people' make you a d!ck or more to the point a jealous d!ick. The politics of envy.

Anyone who gets themselves in this position is obviousley a silly billy.

But you do raise an interesting point, possibly worthy of its own thread.

Are accountants Dicks?

Discuss :rolleyes:

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Anyone who gets themselves in this position is obviousley a silly billy.

But you do raise an interesting point, possibly worthy of its own thread.

Are accountants Dicks?

Discuss :rolleyes:

Okay so to answer that firstly tell me what you think accountants do?

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Half a million quid for a 1 bedroom flat and he's a first time buyer!

Sums up all that has gone wrong in this country. Completely mental - and that's all involved in the purchase - even to believe it could be worth that much. Beyond reason.

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Anyone who gets themselves in this position is obviousley a silly billy.

But you do raise an interesting point, possibly worthy of its own thread.

Are accountants Dicks?

Discuss :rolleyes:

The ones that get to partner level by enlarge are, in that to get there they had to brown nose, back stab and betray others to get to such a position.

The middle to low staff come from all sorts of areas (I was on the border between low and middle staff)

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It's not going to be straight forward for the developer(s) either:

"They [the buyers] are stuck in negative equity after purchasing London flats that are not even built."

The more buyers that are forced by the developer to go bankrupt, the more chance that the whole building will be mothballed - that is unless they can re-sell these units once again off plan but now at a cheaper price to new buyers. They cannot - because lenders will not lend on these properties unless the LTV is really high to reduce the bank's risk! But even if they did this will anger existing buyers who have paid the previous higher price.

What a mess.

Expect to see loads of un-finished builiding sites appearing.

Edited by crashologist

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Mmm... you know I was thinking of writing-off my Accountancy qualifications as there is a glut of part-qualifieds and I'm not going to be returning to the workplace for years. But if this debt bubble means that a lot of accountants are going to get struck off due to bankruptcy, there might be a small space in the job market for me to carve out a modest career once my children are at school.

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Mmm... you know I was thinking of writing-off my Accountancy qualifications as there is a glut of part-qualifieds and I'm not going to be returning to the workplace for years. But if this debt bubble means that a lot of accountants are going to get struck off due to bankruptcy, there might be a small space in the job market for me to carve out a modest career once my children are at school.

This won't work (I'm a PQ btw I'mm 95% of the way there but can't qualify because I can't get the last few months of work experience because nobody will give me a job).

As there are tons of people still coming up , in that last ACCA exam I sat there were over 3000 people taking that exam in the room.

And accountants have to develop a nice little niche, if I were qualified I'd probably setup on my own and exploit various niches that I am well versed in.

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It's not going to be straight forward for the developer(s) either:

"They [the buyers] are stuck in negative equity after purchasing London flats that are not even built."

The more buyers that are forced by the developer to go bankrupt, the more chance that the whole building will be mothballed - that is unless they can re-sell these units once again off plan but now at a cheaper price to new buyers. They cannot - because lenders will not lend on these properties unless the LTV is really high to reduce the bank's risk! But even if they did this will anger existing buyers who have paid the previous higher price.

What a mess.

Expect to see loads of un-finished builiding sites appearing.

500k for 10 flats:

http://www.rightmove.co.uk/property-for-sa...6x%3D99%26y%3D9

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Mmm... you know I was thinking of writing-off my Accountancy qualifications as there is a glut of part-qualifieds and I'm not going to be returning to the workplace for years. But if this debt bubble means that a lot of accountants are going to get struck off due to bankruptcy, there might be a small space in the job market for me to carve out a modest career once my children are at school.

it's amazing - I'm not an accountant - but it does appear that half the accountancy profession don't seem to understand the meaning of debt and risk

am I wrong in saying this?

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I don't have a lot of sympathy for anyone stupid enough to have got themselves in this position, but surely their only option is simply to write to the developer explaining that they will not be in a position to complete due to the change in circumstances, making it clear that they have no assets and will simply go bankrupt if any legal action is taken for breach of contract.

It is very unlikely that the developer will go to the expense of taking any further action at all. They don't know that bankruptcy would be a career ending catastrophe; for most people it has no effect whatsoever.

My experience is that as soon as you mention bankruptcy most creditors just go away.

I'd agree... there are literally thousands upon thousands of people in this situation for various reasons..... of course its not quite as simple as the article makes out and the prospective purchaser does have some options.... for instance he could have the property valued by an auctioneer... I suspect they will say £250k not the £400k he thinks.... he can then go back to the developer and ask to renegotiate the deal offering say £350k.... the interessting thing is that in all these contracts the developer is beholden to act in the purchasers best interests, reducing his costs where possible..... so heres the scenario.. developer rejects the offer and goes to agent, it doesn't sell, he takes it to auction, it sells for £250k.... on paper the developer goes after the original purchaser for £250k less deposit of £150k....... actually though the court is likely to say that as the original pruchaser offered £350k as a deal then that limits his liability.

I don't think theres anyway the original purchaser will come out smelling like roses, he'll either lose his deposit or have to transact at a higher tthan true price BUT.... theres no way any of these guys should go down as far as being indicated they will if they fight.

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Why is everyone so surprised that accountants are poor at assessing business prospects? They count beans, they don't figure out how to get more beans.

Apologies to any accountants reading - I happen to think counting the beans is very important.

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Okay so to answer that firstly tell me what you think accountants do?

Count Beans, Manage finances. Count Beans, Identify Risk, Count Beans, Manage Risk, Count Beans, Identify the best return for their clients, Count Beans, he he he

Sorry couldn't resist ;)

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Why is everyone so surprised that accountants are poor at assessing business prospects? They count beans, they don't figure out how to get more beans.

Apologies to any accountants reading - I happen to think counting the beans is very important.

You are not that far from the mark actually.

There is a saying in accountancy circles ,

That accountants in practice record wealth , while accountants in industry attempt to create wealth.

I've been trying to make the jump over to industry for a while now but the jobs just aren't there.

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  • 294 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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