Monday 25 February 2008

Northern Cyprus Mortgages

I'm not sure how many of you will have spotted that Global Mortgages Direct (GMD) in Kilkenny announced a few weeks ago that they would be launching mortgages for those looking to buy property in Northern Cyprus.

Now quite apart from the obvious problem with title deeds here (if you don't know much about this you should probably research it a bit, there is some stuff on which will put you in the frame). Basically the Turkish still have a hold on the northern part of Cyprus since an invasion in 1974, in order to stop the Greeks from taking over the island. In 1984, however, the Turkish Republic of Northern Cyprus (TRNC) declared independence, but is only recognised by Turkey. Hence if you wish to fly to the capital, Kyrenia, you have to go through Turkey, flights from any other country in the world don't exist. I had a slightly odd experience last year when flying from London to Ismir.

The plane landed and virtually nobody got off, so I wasn't sure if we were in Ismir or not, as no other destination appeared on the boards in London. I had to enquire from the stewardess who informed me that the flight was continuing to Kyrenia but, as TRNC isn't recognised outside of Turkey they couldn't advertise the fact in London.

In any case, this didn't strike me as the safest place in the world in which to be looking to acquire a mortgage. There are huge problems with the many forms of title deed in TRNC bar one, that issued prior to 1973 by the Cypriot government. Of course most developers will claim that they have this type of title deed just to get you to buy, but most of them are not the real thing. There will eventually be a huge fallout in property ownership in this region, particularly if Turkey is ever to join the EU, as it will be a stipulation that they give the north back to the Republic of Cyprus. It is, as they say, an accident waiting to happen.

Therefore the launch of GMD's mortgages was somewhat of a surprise, but then so was the announcement in the Sunday Tribune yesterday that they'd withdrawn them, less than three weeks after they'd been launched. Apparently the Irish government, obviously under some pressure from the Cypriot ambassador (who is renowned for being very vocal on this topic and most likely outlined the danger Irish buyers could be drawing on themselves) complained to the company and asked them to withdraw the product, so they did.

Who says the government doesn't work (at least sometimes).

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