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dryrot

Berkeley Homes: Buyers Trapped In Mortgage Nightmare

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hi

this was on the HPC front-page - thx "mytimeisnigh" - but I could not find it on the forum. I think it's worth a forum topic!The house of cards is in collapse-mode. Pan Peninsula made the news, now Greenwich. Usual story, yuppie "investors" wanted a one-way bet. Where will it end?

http://www.guardian.co.uk/money/2009/aug/0...ortgage-deposit

"Dozens of young professionals say they face financial ruin because one of Britain's biggest housebuilders, Berkeley Homes, is threatening to sue them for tens of thousands of pounds after they signed up to buy new flats before being left high and dry when the property market collapsed.

Some claim they face losing their life savings, being made bankrupt and even being made homeless because a lack of mortgages means they are no longer able to complete the purchase of apartments they agreed to buy at the height of the boom.

In some cases the flats are valued at 40% less than the original price and mortgage offers have been withdrawn, leaving buyers in the near-impossible position of having to find perhaps £100,000 or £150,000 to plug the gap.

[...]

Most of those affected signed up to a property at one of three Berkeley developments in London: Caspian Wharf in Bow, Royal Arsenal Riverside in Woolwich, or Chelsea Bridge Wharf in Battersea. They typically bought "off-plan" in 2007 or early 2008, putting down a deposit of 10% with the balance due on completion."

Edited by dryrot

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Thanks for the link TC

Need a dose of regular "Pan Porn" to cheer me.... err commiserate :lol:

mmm, they took out an 18 month pwoperdee call option at the end of 2007, erm and how is that exactly my problem, twats

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When you read exactly what risks these people were exposed to, it really is irresponsible that they were not better explained at the time of investment... Do you think Berkeley fully explained all the consequences of various outcomes? Course not. Another reason why property market participants need regulating.

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When you read exactly what risks these people were exposed to, it really is irresponsible that they were not better explained at the time of investment... Do you think Berkeley fully explained all the consequences of various outcomes? Course not. Another reason why property market participants need regulating.

they were probably ALL bankers or city gents.

why would they need it explained?

of course, they didnt see it coming.

well now the train has arrived, its time to board.

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Well, at least people wont have to be bored rigid at tales of their new flat in blah de blah wharf

Find it hard to have sympathy with an IT consultant borrowing 405K to buy a flat, cmon man that's just asking for trouble.

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When you read exactly what risks these people were exposed to, it really is irresponsible that they were not better explained at the time of investment... Do you think Berkeley fully explained all the consequences of various outcomes? Course not. Another reason why property market participants need regulating.

I don't think its a legal requirement for builders to come up with investment disclaimers.

A lot of these people were "intelligent" professional, and many would have worked in local investment banks. They knew exactly what they were signing up for. I'm sure thats how a judge would view it too.

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they were probably ALL bankers or city gents.

why would they need it explained?

of course, they didnt see it coming.

well now the train has arrived, its time to board.

Neither of us has a clue so this is a particularly stupid argument but I personally would be surprised if many of them were bankers. Most bankers are too smart to buy crappy E14 property at £500+ a sq foot.

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Neither of us has a clue so this is a particularly stupid argument but I personally would be surprised if many of them were bankers. Most bankers are too smart to buy crappy E14 property at £500+ a sq foot.

Err if you read "The Wharf" post, one of them worked for Citibank and lost his job!

I do personally know a guy who bought off plan there, and he ran a successful internet company. These are not your average muppet.

"The Wharf" does have a role to play here. They are terrible property rampers, most of their income coming from Wharf EA's. Needless to say they never dare say a word wrong about the Canary Wharf Management company.

Edited by HostPaul TAFKA Rover2000

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Neither of us has a clue so this is a particularly stupid argument but I personally would be surprised if many of them were bankers. Most bankers are too smart to buy crappy E14 property at £500+ a sq foot.

I do not share your optimism about how insightful bankers are. Isn't all the evidence otherwise??

What strikes me about this piece is the price of the flats. What sort of income do you need for one of these rabbit hutches? If people can afford them, then it says much about the inflated level of London salaries. London needs deflating, not just house prices.

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Neither of us has a clue so this is a particularly stupid argument but I personally would be surprised if many of them were bankers. Most bankers are too smart to buy crappy E14 property at £500+ a sq foot.

course its stupid.

they should have seen it coming..

and its canary wharf...who are the big employers there...is it A) roadsweepers, B) productive manufacturers C) finance D) Disneyland

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Neither of us has a clue so this is a particularly stupid argument but I personally would be surprised if many of them were bankers. Most bankers are too smart to buy crappy E14 property at £500+ a sq foot.

True, and some of Berkeley's developments are in much worse areas than E14 (e.g. Woolwich)

Looking at the support forum they have set up, some weren't even employed when they bought off-plan, e.g. Christian:

I first put down my life savings in 2007 on a flat in the Royal Arsenal. At the time I was a student, excited about the prospect of getting on the property ladder and starting a new job.
http://www.berkeleyhomescollective.com/for...rsonal-stories/

But I've not yet seen anything as amusing as the guy that bought offplan in Pan P using his credit card :lol:

EDIT: I can't find that last quote about the credit card... apologies

RE-EDIT: oh yes i can http://www.wharf.co.uk/2009/03/pan-peninsu...s-struggle.html

Edited by Toilet-Currency

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I do not share your optimism about how insightful bankers are. Isn't all the evidence otherwise??

What strikes me about this piece is the price of the flats. What sort of income do you need for one of these rabbit hutches? If people can afford them, then it says much about the inflated level of London salaries. London needs deflating, not just house prices.

i dont think thats a correct assumption, the bankers werent completely stupid and most were well aware of what was happening but there was little point in not joining in if you were getting bonuses based on the jam today concept, who cares if it goes pear shaped later, you receive the bonuses today.

I was working for Lehman up until early 2006 and by then probably 70% of the department had started taking out protection against house price falls through the Halifax pricing index, by the time Stearns went i would of thought nearly everyone had done so, certainly those i still keep in touch with

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"The Wharf" does have a role to play here. They are terrible property rampers, most of their income coming from Wharf EA's. Needless to say they never dare say a word wrong about the Canary Wharf Management company.

Yep

The Guardian had better watch out, printing articles like this which side with the little people.

They are already going to lose lots of the public sector job adverts- dont want to burn bridges to the property "industry" too.

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Savvy investors snapping up luxury apartments to add to their portfolio learn not only that prices DO sometimes come down, but that they are actually expected to meet their financial commitments.

Boo f*cking hoo

tinyviolin.jpg

:lol:

Edited by narrowescape

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In the end if these flats had doubled in value but these people were still paying the agreed purchase price how would they react if Berkeley asked for more money.

Personally you feel sad for those who wanted to live there - but in the end its a lesson to all. Live within your means and don't expect borrowing to fund your expensive tastes! IT consultants and accountants should know better!

Who on earth would pay £450k to live in a flat in Bow anyway. or £300k to live in a flat in Woolwich. Most of the people living in these areas got their housing there by not working and being unable to use contraception (i.e. social housing). :lol:

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When you read exactly what risks these people were exposed to, it really is irresponsible that they were not better explained at the time of investment... Do you think Berkeley fully explained all the consequences of various outcomes? Course not. Another reason why property market participants need regulating.

Come on, it is not, as they say, "rocket science".

They simply agreed and put down a deposit to buy a flat for a price they both were happy with.

If people need it explaining that house prices may not go up for ever, they shouldn't be allowed to look after their own money, or maybe even cross the road on their own!

These people aren't, on the face of it, dimwits. If they can afford £400K flats in the first place, they should have thought about what they were doing.....

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Ah, what a lovely story to warm the cockles of my heart.

Greedy get rich quick BTLers, sorry property investors, fall flat on their faces. Diddums.

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On the support forum, those claiming they have been victims of misselling are complaining about the fact that they were being sold "executive homes" without BTLers or were assured the affordable housing (i.e. potentially DSS) would be in a separate block, which turns out not to be the case.

The indignity of it! :lol:

The site seems careful not to accuse Berkeley of mis-selling on other grounds - presumably when people bought off-plan, the small print was quite clear about the buyer's resposibility to secure an appropriate guarantee of mortgage finance.

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There are over 70 floors of appartments though (2 buildings)... so maybe thats not a very high proportion.

70? Oh lord... I grew up where the 8 storey hospital was the biggest thing for 60+ miles, then moved to an area where 3 storeys was big for 60+ miles.

70??? oh my.

I'd feel ill just looking at it.

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