Property: Loss leaders

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The Independent Online
HERE is a little something to throw into the conversation if you get called in for a lecture on keeping up with mortgage payments.

The average repossession wilts beside the breathtaking losses being announced by building societies and insurance companies after their ill-judged rush to buy estate agencies. While you the individual are thrown out for debts of a few thousand pounds, big companies have been losing hundreds of millions.

Abbey National has just admitted spending more than pounds 200m to set up the Cornerstone chain, which now has its own 'for sale' notice. Bristol & West is also trying to unload more than 100 agencies, while the Prudential still holds the record for losses after retreating in 1991 with a shortfall of more than pounds 300m.

How many people would be still sitting under their own roofs if the pounds 1bn said to have been written off on these empire-building ventures had been available for rescue schemes? Old-timers warned at the start that selling homes is a people business, not a financial factory. But buyers and savers have ended up paying for the arrogant refusal to listen.

DIANA HANKS of the Timeshare Council was feeling rather frazzled by the time I got through to her after a day of engaged signals from her phone. Another crook had been exposed on television the night before and hundreds of victims were calling for advice on getting their money back. No chance, of course. The Timeshare Act introduced last year does not cover deals outside the UK.

A glimmer of hope is emerging for Europe-wide controls, however. Consumer affairs ministers quietly gave the nod a couple of weeks ago to safeguards that will ban down-payments and give buyers the right to withdraw from unsatisfactory deals. The trouble is, this must be approved by MPs in each country, then go back to the European Commission before becoming law. That could take a couple of years.

In the meantime, buyers could help themselves by not leaving their brains at the airport when they go on holiday.

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