Off-plan Fund Share Discussion Threads

[barnetpeter] 13/3/2009 10:09

Yes Tara that is the bulish case. The bearish case is they r liable for the full amount. We will see in a week. I hope you are right.

[tara7] 12/3/2009 15:26

Also my view with so many burnt in the last two years , who would pay full price for an flat off plan, formed out of an old office, block for 200k.!!!!!!!!!

[tara7] 12/3/2009 15:21

Just my point, OPF would have a capped loss at Wallington of 4.5m pounds, [if the flats are built], however the builder and bank are left with all the stock as OPF walk away, and the loss to them is huge, way over 4.5m, [as the loan piles on the debt.] They know this from the day they start the build, so what is the point in starting.? OPF are then let off the hook as the flats do not get built, and they OPF get all the cash back, just as they have done on the other sites. All the above in my view.

[jailbird] 12/3/2009 09:39

found this today

Buyers face bankruptcy in off-plan timebomb
Sri Carmichael, Evening Standard
11 March 2009


Negative equity: many buyers are short of up to £150,000 on flats at developments such as Caspian Wharf in Limehouse, above

They are stuck in negative equity after purchasing London flats that are not even built. Many are facing a financial black hole of up to £100,000 as the homes plunge in value and lenders refuse a mortgage.
They are legally liable for the full cost of the apartment because they have already exchanged contracts but most do not have the cash to fund the huge investment and could be made bankrupt and sued as a result.

The Standard has learned that buyers in at least 11 off-plan schemes in London, run by five separate developers, say they will be unable to complete.

Thousands could be affected across Britain as contracts on 12,000 new homes are due to be completed in the next year and most developments sell at least half of their homes off-plan.

Experts warned of an 'off-plan timebomb' over the next two years as many hundreds are forced to default.

A first-time buyer who exchanged on a two-bedroom flat in one London development, and is due to complete later this year, estimates he will be £150,000 short. An accountant, he fears being struck off if he is sued and made bankrupt. The man, who asked to remain anonymous, said: 'I can't sleep. I'm worried I could lose my career and my life will fall apart.'

The man has paid a 15% deposit on a property he exchanged on for £500,000. But it is now valued at £400,000 and he can only borrow 70%. He added: 'I owe £425,000 but I can only get hold of £280,000. It's a nightmare.'

The off-plan market was rampant in 2006 and 2007, with many seeing it as an easy way to profit. But buyers have been hit as values slumped by up to 30% and mortgages worth up to 95% of the purchase disappeared.

Mark Loveday, a property barrister at Tanfield Chambers in London, said: 'The off-plan timebomb is huge and has already started to go off. It's a nightmare because the level of debt and money lost is huge.'

[tara7] 27/2/2009 19:07

Also, results have gone back 4 weeks , could the reason be new loan terms that the bank , builder and OPF would be happy with. After all, how can the board make a rec on how to vote, if this site is up in the air. OPF are a party to the loan. If the bank felt they would lose cash if OPF went bust [to the tune of the £4.25m ring fenced], the deal would be off. The loan tests may be each 6 months or for sure 12. In the last 12 months we know the shop and office value is down 40% and the flats to be are down 30% plus. Also note poll tax is due each month on that huge office block, Who is paying for that.? All above in my view

[tara7] 27/2/2009 18:49

Go to HBOS home page , look at media 3rd March 2008. So the deal was done a year ago today, Looks like conditions were not passed and all sides may now want to pull the plug on those terms.

[mdchand] 27/2/2009 17:21

As an aside it would be interesting to see if BoS honour their finance agreements on Wallington. After their last results, I believe Lloyds are looking to shut up shop almost completely on the property lending side as they are sitting on enormous amounts of bad and doubtful debts. I wonder if they a firm guarantee of finance or more an agreement in principal........

[barnetpeter] 27/2/2009 16:08

Doesn't matter. Very few trades on this but the spread is reasonable.

[jamie62] 27/2/2009 14:34

just goes to show the old adage of DYOR

[barnetpeter] 24/2/2009 22:07

My view remains that tara is exaggerating but at a mkt cap of just 1.4m, this is a decent punt. If tata is half-right, plenty of upside.

[tara7] 24/2/2009 15:18

Thats just a build deadline, what you want to ask yourself is why has work not started a year after it should.? The bank loan [if drawn to buy the land] is clocking up day by day, at a high rate above LIBOR. All the signs are pointing to things not being right from day one. Infact all pointers have been down since, the loan in my view will be at a fixed rate of at least 8% it was agreed this time last year as rates rose. The end value of the shops and offices will be half of what they hoped for. The HA will not pay a good price for that part ofthe devp.

[mdchand] 24/2/2009 15:04

tara - a lot will depend on how the contract is drafted and whether their exist break clauses which allow OPF to rescind the contract. In previous examples, there were deadline stipulations which allowed the company to rescind its contract.

Unfortunately, looking at the original Wallington RNS it does mention 2010 which suggests that any relevant deadlines will be towards the end of 2010.

[tara7] 24/2/2009 13:26

Are man from Henry homes says paperwork takes a year, YER RIGHT.!!!!!!

[touch2002] 24/2/2009 13:13

humm, that would explain the lack of site updates!

[tara7] 24/2/2009 11:22

Who in this new age is going to buy into an 1970"s office conversion for 200k,??? with a service charge costing in my view more than the next door H/A DHSS pays in rent. The dream is over,

[tara7] 24/2/2009 11:12

So, as is my view, OPF will get out of the deal and get the 3M plus back, just as it did on all the other off plan sites in the past.

[tara7] 24/2/2009 11:11

That just sums it up, Not started on site WHY.? Look at the old timetable on the OPF site. To me HA not going to pay for un started flats, when they can buy lumps of finished flats,at 40% off. values of private flats falling like a stone, can not give the shops and offices away, plus the terms of the bank loan may now have to be changed. It in my view looks grim for the bank and builder.!!!!!

[mdchand] 24/2/2009 10:58

right then - just spoke to nigel henry from henry homes (i'm assuing he is the 'henry' in henry homes). he said development was still progressing - it was just taking time to get the paperwork all ready. i asked if he expected development to happen later this year / early next and he said that he hoped things would actually start progressing fairly soon (of course, he could just be saying that, seeing as I was phoning as a potential buyer).

[tara7] 24/2/2009 10:50

Results out by Fri this week, [often around lunchtime.] see last years.

[tara7] 24/2/2009 10:49

Around May last year the shops and offices were put up to rent and the web page above was done. I rung the HA to find out about start date, they said they pulled out.!! The site in my own view is a dead duck, bank loan is 21m pounds, running a year late, NO one buying off plan unless 45% off. Note all the other sites have fallen through. 400,000 shares changed hands at 12p ish a week or two ago, no MM would take that stock without a buyer in this market.

[touch2002] 24/2/2009 10:36

mdchand - I saw the same site, hence my comment above. That Henry Homes have the marketing was agreed (I think) at the time of the deal - you might feel different buying your home off 'off-plan fund ltd'?

tara - a blind ramp re: wallington, or is there more of substance behind your comment?

[mdchand] 24/2/2009 10:22

tara - i note the bankers to wallington was BOS which is never a good thing. however, click on the following websites and it seems that they've got things moving on the marketing front already.

It looks like Henry Homes are doing all the marketing effort - which surprises me if all the properties were presold to OPF.




Do you mind if I ask how you know building on Wallington hasnt started yet.

[touch2002] 24/2/2009 06:39

tara - is that right, I thought that given the lack of update to the contrary, Wallington was well underway (although to be fair I was wondering why there wasn't any update on the sales website)...

[tara7] 23/2/2009 23:10

85p is what we might get back per share if Wallington falls through [like the rest have.] Building work had not started last month, a full year after it should have.!!!