Thousands of Britons caught up in a property mis-selling scandal in Cyprus have been given an extended deadline to lodge a legal claim against lenders and property developers.
The deadline was previously set for the end of this month but has now been extended for 12 months to 31 December 31 2014.
As many as 15,000 Britons bought property in Cyprus between 2003 and 2009, most of them buying off-plan.
But huge currency fluctuations during the financial crisis left many facing financial disaster when their mortgage payments doubled or tripled and property prices plunged, according to a report in The Daily Telegraph.
Most were buy-to-let investors who planned to offer the property to holidaymakers. Some were expats who moved to the island to work or for retirement.
Banks and developers advised buyers to take out Swiss franc mortgages because the currency was considered stable and the interest rates were comparably low.
But it soared 40% against the euro in the aftermath of the financial crisis, while some banks also hiked mortgage rates.
Cypriot property values also plunged by up to 70%, trapping investors in negative equity.
UK buyers are estimated to have £1.3 billion of debt outstanding to Cypriot banks.
They claim their mortgages were mis-sold because banks didn't alert them to the currency risk. Others said Cypriot solicitors used invalid powers of attorney to commit them to loans with terms different to those marketed.
Developers also took out mortgages using the title deeds on their properties as collateral, which meant their homes could be sold in order to pay off developers’ debts.
Some properties were never finished or lacked amenities such as golf courses and spas which were promised by developers.
There has been a lengthy legal battle to determine whether mis-selling cases are heard in the UK or Cyprus.
Buyers have been advised to lodge a claim in the UK first, then log a second claim in Cyprus as protection against the cases being heard there.
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