“Most high profile casualty of the Cyprus property crash”
DEREK HATTON’S Morpheus Investments Limited has filed for insolvency – owing creditors nearly £400,000
The company, which was heavily involved with a project to build an 18-hole golf course and over 500 private homes near Larnaca, blamed dire property sales in Cyprus for its demise.
“The problem was, sales have plummeted. But I’m confident about the actual area. Things will improve by this autumn,” Hatton told the Daily Mail.
In addition to residences – a clubhouse, a village square, spa and purpose built function rooms were also being touted as part of the luxury development by Hatton’s company.
It remains unclear whether the winding up of Morpheus, which acted as an agent for the project, will affect the construction of the developments – most of which are still in the building stage.
However, their website, which claims they are “the UK’s leading experts in providing quality Cyprus investment properties,” remains online advertising half a dozen plots on the east coast.
The site adds, “The property market in Cyprus is still performing very positively and although the media love to talk about the credit crunch and all of the doom and gloom out there, we at Morpheus Investments don’t see it!”
Hatton, 61, claimed back in March that 200 off-plan properties he marketed had been sold. Last night he assured customers that their investments are safe and contacts would be honoured.
“Everybody who has bought an apartment or a villa through us will see it built and completed. Their contract is with the developer, not us, and the cranes are on site and the build is continuing – and they will be completed on schedule.”
David Platt from the insolvency practitioner dealing with the case told the Cyprus Mail that he was unaware of any complaints from existing customers or buyers.
“As I understand it the company (Morpheus) was paid by developers for sales on a commission basis and I believe they did have sales.
“All I can tell you is that Morpheus Investments has ceased to trade,” he added.
It is unclear how the actual number of homes that were sold by Hatton, but property analyst Nigel Howarth told the Cyprus Mail he had not met or heard of many purchasers.
“I only know of two people who bought through Hatton’s company; they each bought a holiday apartment in Kiti.”
Hatton claims he is personally owed £312,000 by the collapse of Morpheus, which was put in hands of a liquidator last week.
A statement of affairs sworn by Hatton says that the other creditors included HM Revenue and Customs, Barclays Bank and The Professional Group of Companies, which is owed £78,333 on a rent deposit deed.
Last night Hatton insisted that he is the only loser, with Morpheus listing their only assets as office desks, chairs and IT equipment worth around £3,000.
“’No one is going to suffer except me. The developers are still building the developments concerned, and they are responsible for the sites, which will be completed on time.
“One of my companies has gone – the one which sold properties in Cyprus – but my rental and management company is continuing as usual,” he added.
Hatton who lives in Potamos near Ayia Napa, remains in charge of Morpheus Rentals, which offer apartments and villas for short terms lets, primarily to the British tourist market.
A leading property analyst told the Cyprus Mail that he would not be surprised if the collapse of Morpheus will be followed by a series of developer bankruptcies.
“Derek Hatton is the most high profile casualty of the Cyprus property crash, just wait and see what happens next. He is the first, but won’t be the last – no by a long chalk,” he said.
Earlier this month the Cyprus Land Registry Department confirmed that the property market had gone into freefall when they announced that the number of property sale contracts in April fell 54.9 per cent year-on-year.
The latest figures follow a staggering 64.7 per cent reduction in the number of property sale contracts in the first quarter of 2009.
Sales in Paphos, Larnaca and the east coast were affected the most due to their dependence on sales to non-residents.
The figures confirmed the steep decline in the once booming development sector and hit the state hard with a massive drop in tax collection by the government from property deals.
Hatton, who was expelled from the Labour Party in 1986 for being in Militant, was catapulted back into the international news earlier this year when he told the Cyprus Mail that it was a pity Margaret Thatcher’s mother did not believe in abortion.
His remarks prompted widespread condemnation in the British press.
