Some “dozen or so” protestors handed out leaflets outside the bank last week, in an effort to call attention to their plight, according to the Cyprus Property News, which has been covering the story since it first began to emerge after the global financial downturn in the latter part of 2007.
Last week’s protest was the latest in a series of efforts by some of an estimated 1,000 or more Britons and locals who were sold Swiss franc loans by Cypriot banks and their agents before 2008, during the peak of the island’s property boom.
Alpha Bank was targeted because its Cyprus subsidiary was one of the Swiss franc mortgage lenders.
The matter has now advanced to the point that a number of investors have turned to lawyers and UK and EU politicians, in an effort to prevent being pursued in the UK for their debts by Cyprus-based banks, and possibly losing their UK homes as a result.
Many of those who are out-of-pocket are UK residents who were convinced by financial advisers to buy the properties – an unknown number of which have not yet been completed – as investments.
In what would later be revealed as making an ill-judged investment decision worse, many of these investors opted for the Swiss franc mortgages because the interest rates on these at the time were significantly lower than the rates on offer for Cyprus pound mortgages. (Cyprus joined the eurozone in January 2008.)
Since that time, however, the value of Cyprus properties has plunged, while the strength of the Swiss franc has soared relative to the euro, the currency now normally used to buy and sell properties in Cyprus, and to the pound. This has left many UK and Cypriot property buyers in possession of properties worth far less than they owe on them, or than they are worth in the current market.
From Chf2.36 in September 2007, the pound has fallen to where it is now worth just Chf1.50.
At least some of the investors, meanwhile, insist that they never knowingly took out the Swiss franc mortgages that they now hold, arguing that this had been done without their consent as part of an investment process they were not kept informed about.
Lenders taking action
The result, says Nigel Howarth, editor and publisher of the Cyprus Property News, is that banks in Cyprus “have started issuing writs and termination notices on those who have defaulted on their mortgage repayments”, and investors, such as those who demonstrated last week, are fighting back.
“Several hundred buyers are now being represented by legal groups who are taking action against banks and developers in Cyprus and UK-based financial advisers,” he reports.
“This is a Waterloo moment for everyone, because they are going to have to fight this,” Gareth Fatchett, a solicitor at Regulatory Legal, which is acting for 750 homeowners, told The London Times – one of a growing number of publications and media outlets that have begun covering the story over the past year – in September.
The story of the Swiss franc investors in Cyprus, the Times concludes, "is a warning to anyone buying a property abroad, especially using a mortgage in a foreign currency".
On Friday, the Northern Echo, a newspaper in County Durham, where a number of investors caught up in the Swiss franc/Cyprus property saga live, reported that MPs in its area had "agreed to join an all-party parliamentary group to help" the investors.
It quoted Stockton South MP James Wharton as saying: "We want as many people as possible to engage with us so we can put pressure on the government of Cyprus and look to see what the Foreign Office can do."
A spokewoman for Alpha Bank in London declined to comment on the investors’ claims or on last week’s demonstration, and referred International Adviser to the Greek bank’s Athens headquarters, where another spokeswoman said to call back on Wednesday.
