Pan Peninsula buyers struggle to pay for dream homes
Falling property prices have left many Pan Peninsula buyers struggling to pay for their dream homes.
Buyers flocked to snap up apartments in the Millharbour development just over two years ago. But some are now reportedly making "irrational" decisions to meet costs.
Pan Peninsula is regarded as one of Europe's most luxurious developments, boasting its own private cinema, 50th floor cocktail lounge and spa.
Prices ranged from a quarter of a million for a studio to £12million for the most prestigious penthouse in 2006.
But, in keeping with a dilemma faced by property buyers across the capital, worried purchasers report that some mortgage valuations are now almost a third lower.
Many of the 762 unit owners have joined the Pan Peninsula Buyers Association, a 300-strong group which is hoping to persuade developer Ballymore to renegotiate their contracts to reflect the reduction.
But Ballymore says that only 10 per cent of purchasers are struggling financially and it has established a special department to help them.
A committee member for the association said: "Valuations are coming in between 10 and 30 per cent lower than those done at the time of putting down the deposit, which equates to up to about £40,000 for a studio apartment to £600,000 for a penthouse.
"Banks are withdrawing their previous mortgage offers. You used to be able to get 90 per cent or 95 per cent mortgages. Now the offers are around 60 per cent, and buyers have to make up the shortfall.
"Some have made irrational decisions such as putting £40,000 on a credit card, while others have taken out additional loans.
"One young buyer was made redundant by Citigroup and had to move back in with his parents. His flat is in negative equity of ten per cent already, and he hasn't got a penny to his name.
"People want to complete because it's a lovely development. It's the place to be, it's spectacular inside and everybody is looking forward to moving in. But our solicitors tell us we should not be made to complete under these circumstances."
Ballymore told residents in February that purchasers were "required to proceed with the purchase at the contract price" as contracts were not "exchanged on a subject-to-mortgage basis". The company stated it reserved the right to forfeit deposits and recoup any losses.
But Ballymore's group director for strategy and communications Paul Keogh told The Wharf: "There are less than 10 per cent of purchasers finding difficulty finding finance to complete - we have set up a special department to help them. Pan Peninsula is considered the premier location in London at present."