Friday, September 18, 2009
A place in the sun
British owners of second homes overseas are facing ruinous losses on their investments after plunging price drops in foreign markets wiped as much as Â£24bn from the value of UK-owned homes abroad. Dubai and Bulgaria are the worst hit markets, with peak-to-trough price falls of 75pc on new-builds. The high levels of debt used to engineer transactions have ratcheted up the risk of financial problems. Foreign banks are seeking to chase their losses in the UK in the event of mortgage default. Since last Christmas, EU creditors can pursue a European order for payment which makes the process of debt recovery easier and cheaper. US banks will no longer lend to the British as so many have handed the keys back and done a runner. US banks now believe it is worth pursuing unpaid loans in the UK.