If a buyer is being forced to complete a new build purchase contract, but is short of funding (eg because the mortgage has been withdrawn due to the reduced loan-to-value ratio), then it may be worth offering to make a partial payment to the developer, with the balance being owed to the developer secured by a second mortgage over the property. In practice, of course, this arrangement would probably have to be declared to the primary lender, and that may well cause difficulty. But, from the developer’s point of view, whilst such an arrangement may not be attractive it may be better than receiving no money at all.

Another alternative is to consider whether the developer might agree to enter into a shared ownership arrangement. The buyer would then buy a share of the property and rent the remainder. Once again, this would not be ideal from the developer’s point of view, but at least he will get some money in from the initial sale of part, and there should be regular rent payments to help cashflow. Source: [2009] SJ December (Property Supplement) 19.