How To Help The Next Rosie Dyer

For every buyer of a One Hyde Park footballers’ wives apartment, there will be a hundred others - no, a thousand or possibly tens of thousands - like Rosie Dyer.

Her story is here and shows how, before late 2007, many reasonable people thought house prices were going to rise inexorably to provide a future pension. Journalist may well have encouraged this belief, for even if we never explicitly wrote that sentiment we often joined in the razzamatazz about The Cube and similar schemes.

Her story is not unusual. I’ve done many pieces (like this one) about off-plan buyers' original mortgage offers being sharply scaled down by lenders just as schemes complete and contracts oblige payment. The purchasers are left high, dry and very possibly bankrupt.

Whose side should we be on?

Developers make the entirely reasonable point that in the first half of the last decade, when the values of new schemes rose between off-plan sale and completion, buyers did not offer to share their windfall. So when values move in the other direction, why should developers have to share buyers’ losses?

That seems compelling to me. Tough love, but plain common sense, with the added element that it is what contract law says, too.

But should the buy-to-let phenomenon have been regarded as 'investment' and not mere 'property'? Should it therefore have been regulated, not in the way that house sales are supposedly regulated through the likes of the Property Misdescriptions Act, but in the way that share dealing and ‘pure’ investments are regulated?

Five years ago the more ebullient developers and estate agents, and their publicity machines, were very pleased to describe bricks and mortar as an “asset class” and to compare its performance against pure investments such as FTSE-100 movements. If that era returns, then perhaps future Cube-type schemes - they are basically upmarket Turkey Twizzler flats aimed at landlords - should not be regarded as homes but as investments.

Then, perhaps, discussions about such schemes by agents, developers and journalists alike would have to cover possible losses and not just “inevitable” gains.

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