A new service has launched designed to benefit thousands of fly to let investors with overseas properties they can no longer afford to keep but find impossible to sell.

It is the brainchild of London businessman Tony Barker, who bought a £120,000 property off-plan in a major development in Paphos, Cyprus in 2006.

Research convinced him he could achieve high yields and significant growth but the combination of higher-than-expected mortgage repayments, a dead lettings market, a drop in his personal income and a slump in demand for properties in Cyprus combined to create a situation he found impossible to sustain.

So he recruited financial advisors at the Marcus James Group and decided to sell the commitment to make the outstanding mortgage repayments to a new investor, who eventually would become the owner of the property.

The concept worked so successfully that the group has now formed a new specialist business – Marcus James Recovery – to promote its unique service and Barker has been recruited to head it as managing director.

Marcus James Recovery charges the property owner a fee of £495 plus VAT to locate a suitable new investor.

If it is unable to do so within six months, the owner can claim a refund of £345.
All rights and charges associated with the property are assigned to the new investor, who pays a one-off fee of £5,250 plus VAT.

“This is a particularly attractive concept for ‘non-status’ borrowers with impaired or low credit ratings, who often find it difficult to obtain finance on normal terms and conditions,” said Barker.

“The Recovery service enables them to take on a mortgage without the need to pay a deposit or arrange for the mortgage to be underwritten. This is now a prerequisite in Cyprus.”

To provide a safeguard for the original owner if the new investor defaults on the mortgage repayments, the original owner retains ownership of the freehold until the balance of the mortgage has been paid off.

Meanwhile the new investor can occupy or let the property. If, in the longer term, the new investor wishes to sell the property before the mortgage has been repaid fully, the original owner is entitled to a 20 percent share of the difference between an agreed contractual figure and the price achieved.

Marcus James Recovery, which estimates that owners of at least a thousand Cypriot properties in are in arrears or struggling with their mortgage payments, plans to expand its business to Spain as well as other locations that were magnets for buyers in the boom years, including Croatia, Bulgaria, Turkey and Portugal.

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