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Thousands of young Londoners are returning from the Middle East as dreams of a six-figure salary and sun-soaked lifestyle turn to dust.
Experts today said professionals who moved to Dubai during the height of the boom are flooding home after losing their jobs — with some abandoning flats, cars and credit cards in the rush to return to the UK.
Richard Harlington, 33, came back to south London two weeks ago after four years in Dubai. It was a life of parties and flash hotel bars, one where the endless supply of credit allowed ex-pats to drive Porsches and employ live-in housekeepers and chauffeurs.
But Mr Harlington, a computer expert who worked in the property industry, lost his job and chose to return to Britain to renegotiate his mortgage as he faced jail for debts in Dubai.
Interest rates have soared in the city to around 8.75 per cent — having a huge impact on mortgage repayments. Meanwhile, falling house prices have put thousands in negative equity. Mr Harlington bought a buy-to-let flat for £200,000 in a futuristic project called Dubailand, which described itself as the “world's most ambitious tourism, leisure and entertainment project”.
But the flat has lost around £60,000 of its value and he fears he may have to write off the £20,000 deposit and hand back the keys. Mr Harlington risked falling foul of a system used in Dubai where buyers have to hand over signed blank cheques as guarantees. If they default on a mortgage or loan, the lender cashes the cheque and contacts the police when it bounces — leading to the borrower being halted at the border and put in jail until the debt is paid.
“At the end, the roads were just like a ghost town,” Mr Harlington said. “The Dubai dream has just gone. I wouldn't recommend anyone goes out there looking for work. If you bought [property] in the last 18 months there is a good chance you are in negative equity.”
Mr Harlington also rented a four-bedroom apartment for about £25,000 a year — his salary had been the equivalent of £120,000 a year in the UK.
Tory MP Brian Binley, who visited Dubai with the Commons business committee, said: “Dubai in 1988 was nothing more than a group of small buildings. It became one of the major cities of the world, but it was based on fantasy, on the continuation of the credit bubble that has come unstuck.” Some of Dubai's immigrant workforce began “flipping” homes before they had been built — making massive gains by placing an order for a new apartment and selling it weeks or hours later, after the price had risen due to apparently insatiable demand.
One of Mr Harlington's former colleagues, who returned to London after being made redundant, said Dubai police had found 1,500 cars abandoned at its airport. “The ex-pats have driven to the long-stay car park, got on a plane and gone home,” he said.
The 32-year-old man from east London, who asked not to be named, lost a £20,000 downpayment on a new home. He added: “As an ex-pat, you are a second-class citizen.”
Reader views (33)
Do you want a little bit NOW or a lot more LATER? Since a majority of buyers, sellers and lenders lost their self-control ( a very normal human instinct!!) and ignored the present life to follow their dreams for a RICHER future ( isn't that uncertain?), they were bound to face a blow! KABOOM! Their dream is over and now its time to learn a lesson from this bubble burst and look into oneself to live a much more balanced lifestyle!! BONNE CHANCE!
- N Jan, Karachi Pakistan, 01/12/2009 06:57
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Dubai was built on the money of the UAE Nationals. The rest live on hopes and promises. The Nationals still have their money, but this lifestyle is impossible to sustain without the captive workforce. Lured from Bangladesh, India, the Phillipines etc., they have no rights and no way home. If these people ever escape and tell their story at home, the labour supply would just go to Africa. Prostitutes from the Baltics were in tow behind most Nationals when I was there. The highways into the city were packed with Emirates on Thursdays and Fridays as were the brothels and beer gardens. This is a profit driven society driven by the pursuit of opulence and greed. Just like the rest of the world.
Dubai will be much like Detroit, as soon as the prices bottom out the speculators will be back to drive the prices up.
As for the UK...allowing banks to lend a million pounds for a tiny flat where the average annual income is 30k only guarantees that the price will be a million pounds! Allowing trans generational credit? The Dole pays people not to work while temporary Polish labourers eagerly take the jobs. An immigration system that keeps skilled G8 trades out but eagerly accepts unskilled illiterates from the 3rd world.
People aren't flocking back to the UK because they want to. Australia, NZ, Canada, and the US are more than happy to take those who want to escape...that's how those nations were formed...lest ye forget.
- Gtk, Davenport, IA USA, 02/11/2009 01:59
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For every expatriate trying to leave Dubai, there are many more trying to get in. The exodus of expatriates interested in nothing more than making a quick buck in Dubai is only part of the picture.
- Sas, Atlanta, USA, 27/10/2009 20:00
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I'm afraid these people are in for a shock if they expect any improvement on their situation when they return to the (post 1997) barren wasteland that is dumpUK.
- Ted, London, 27/10/2009 19:00
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He was earning GBP 120k TAX FREE a year in Dubai and was there for four years! Did he not save anything for the eventual economic downturn?!
No mention of family so I assume he’s a single guy, why rent a GBP 25k a year four bedroom apartment for himself?! There were plenty of studio’s and one-beds available for a third of this price.
Interest rates at 8.75%, what’s the problem? You took out a variable rate mortgage, therefore interest rates can go up and down which will affect your payments, pretty simple really. Or did you expect to borrow money for nothing?
This smacks of naivety and greed by a person who was living and investing way beyond their means. He got caught up in the tail-end of the “global get rich quick” mentality and now feels bitter because the risks he took didn’t pay off. That’s life I’m afraid, there will forever be winners and losers; this is a fact that will never change Mr Harlington.
- Jack, Dubai, 27/10/2009 19:00
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Like all places, Dubai has its faults and to be fair some of them in Dubai are worse than other places.
The "1,500 cars dumped at the airport" story is one of a series of "official" numbers. Yes, do you see some cars covered in dust which MAY have been dumped ... or possibly their owner is on holiday. But thousands - I would question that.
The roads are quieter - but a "ghost town". If only .... there are still more than enough idiots on the roads to make the drive to work the worst part of my day.
"If you bought a property in the last 18 months you're probably in negative equity" - and that's not the case in the UK ?
The "Sex on the Beach" episode will no doubt remain a classic of the Brits - but the same thing happens in the UK.
Yes, some people do go overboard in the hotel restaurants and bars but are we saying they don't in the UK ?
Yes, some people have got into horrendous debt by living beyond their means (err..and in the UK ? ).
And yes some people have been truly caught out by the inflated property prices crashing down.
Most people who are lucky enough to earn decent tax-free salaries I suspect live within their means. Most people are using their time in Dubai to experience the culture, yes, to live a good life - but also to save money.
Dubai has its problems. But let's have some balance and perspective please.
- Adam, Dubai, 27/10/2009 19:00
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Ted - I disagree, having experienced the job market in Dubai and coming back to London, things are a lot better here and I have to say it's good to be back. As previously suggested if you dislike it so much, why don't you leave?
- David Charles, London, 27/10/2009 19:00
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Can we buy P&O back off of them now their bubble has burst too?
- Tom, London, 27/10/2009 19:00
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Ted, having an opinion usually implies having given some thought to an argument, the pro’s and cons being carefully considered before deciding to advocate one side over the other. Writing “dumpUK” on every subject under the sun isn’t having an opinion it’s just being idiotic.
- Nj, London, 27/10/2009 19:00
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Goodbyee, Dubai,
Wipe the tear, baby dear, from your eye-e.........
- Nowan King, London, 27/10/2009 19:00
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I have visited Dubai six times in the last 10 years, my last visit was at the begining of July. The place has changed in 10 years vastly where else would you find a ski dome and an ice rink in a shopping mall. The only main difference I found was that finally all the construction has stopped and that the roads were realitively clear. However the country was fast moving towards defining itself as the monte carlo of the middle east and had already out priced the majority of middle income families from visiting dubai. I for one will not return for a very long time since it was very expensive and had very little to offer!
- Raminder Bhalla, Northolt, 27/10/2009 19:00
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These individual's comments about Dubai are giving all expats a very bad name especially the Brits. For the sake of clarity the roads are still full of cars the city is still vibrant and yes is suffering like everybody else a global downturn so what. The so called high life with parties etc etc is for people living in dreamland and not Dubai. They should have known better. I have lived in Dubai for 30 years and all these were definitely not a smooth drive all along. Ups and downs hard work no roads no malls no nightclubs or weekend parties.But we sweated in order to make Dubai what it is now. So these people that are afraid to go to jail because of debts why are they screaming now or are they so ignorant not to understand that borrowed money has to be paid back or did they expect all their frolics to go free of charge and for Dubai to tell them thank you very much. When they were drinking themselves silly did they not think that there is always a payback situation? The difference of Dubai and UK is the fact you rely on yourself to save yourself and not the state with his dole account and unemployment benefits.
Nobody asked you to join Dubai come to Dubai work and play in Dubai except your own self greed. Now that you have lost your job you go public. Why you didn't go public to exort the virtues of Dubai then?
Stop giving all expats a bad name because of your own shortcomings and lifestyle.
- Tasos Stavrinides, Dubai - UAE, 27/10/2009 19:00
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This whole Dubai-is-crashing story is really getting a bit old, don't you think? It's quite laughable.
I'm still living in Dubai, making lots of money etc as are plenty of other expats. We read these articles and groan, to tell you the truth. Why the morbid fascination with Dubai?
- Dubai Dweller, Dubai, 27/10/2009 19:00
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No taxes
Safe
Inexpensive food
Sun
Beaches
Most of Narcissistic Psychopaths gone
= Dubai is a better place now.
- Jere, Dubai, UAE, 27/10/2009 19:00
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Seems like we have a rapidly developing Crucible situation in dumpUK (Nj and David Charles, London), you know, where having an opinion without boring the world via a monologue (aka new men and the pc brigade) is a crime.
Incidentally, I summer in London (my birthplace) but live on the main Island of Shetland (I recommend it to all). Oh dear, methinks this has become a new man's monologe.
- Ted, London, 27/10/2009 19:00
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Bet the arabs are glad to see the back of these drunken obcene party animals getting up to NO GOOD!!!!!! and get back to where they were before in the 80s.
- Annie, london, 27/10/2009 19:00
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Nj, London - It's called having an opinion, and if you come round and help me pack we can talk about it, or something. Meanwhile, keep reading my comments and have a nice day in dumpUK (it's been that way since 1997).
- Ted, London, 27/10/2009 19:00
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As a Brit who is still in Dubai I dont recognise the place described by Mr Harlington. Where does this notion come from that it is all parties, servants and an easy life. Its a hard life at the best of times but the rewards are still here if you apply yourself to your. This has never been a 'get rich' quick state, you have always had to work hard. As regards the property market its no different than else where in the world at this time.
This is still a good place to live and work. There are Brits out here who have been around for years, I dont see all of them going back to UK but I am sure they would admit that this is a different place than it was say ten years ago. Some will say its a change for for the better and others may think the reverse. For me it still offers me more than the UK can. Its about time the UK press stopped its negative attitude towards Dubai. Most of the comment is wide of the mark and it does the image of the UK no good whatsoever!
- Pedro, Dubai UAE, 27/10/2009 19:00
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I worked in Dubai during the recent boom and quit my job due to the hectic business travel. Dubai felt false to me, I preferred to stay in Bahrain, which felt more Arabic. After 5 months contracting in the UK banking sector I returned to Dubai. The city is a lot nicer now. Dubai has got real and there are less flash fools knocking around here now. The cheaper villa rents and cheap cars available at the daly auctions (from absconding expats) are welcome!
- Francis Scott, Dubai, UAE, 27/10/2009 19:00
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Adam - There is a big difference between what's going on with the UK and UAE property market. Dubai prices have fallen by up to 50% since the peak and many expect prices to fall further with an additional 30,000 units coming online by end of '09 alone, interest rates are still sky high and rental prices are plummeting. Add to the mix thousands of investors that have lost their money on make-believe projects and UAE's incompetent Real Estate authority; RERA and you have one huge mess that I can't see getting fixed for a long, long time.
- David Charles, London, 27/10/2009 19:00
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..and fools rush in...
- Trunk, US, 27/10/2009 19:00
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You were all happy to go out there and milk the system, so why are you surprised when the system wants to bite back. Maybe Dubai can go back to the way that it was in 1988. It was alot better then than now.
- S-M Hearmon, London, UK, 27/10/2009 19:00
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A Canadian couple working in Dubai. She noticed her husband mismanaged their money & they got into debt, he was diagnosed with brain tumor.
There is no concept of bankruptcy in Dubai. If you get into debt & you can't pay, you go to prison. If you have any outstanding debts that aren't covered by your savings, then all your accounts are frozen, and you are forbidden to leave the country.
"Suddenly our cards stopped working. We had nothing. We were thrown out of our apartment." Her husband, suffering from a brain tumor was arrested & taken away on the day of their eviction. It was six days before she could talk to him. "He told me he was put in a cell with another debtor, a Sri Lankan guy who was only 27, who said he couldn't face the shame to his family. Daniel woke up and the boy had committed suicide. He banged for help, but nobody came, & the boy died in front of him."
Her husband was sentenced to nine months' imprisonment at a trial he couldn't understand. It was in Arabic, & there was no translation. She is in Dubai illegally, with no money & must wait until her husband is released from prison.
"The thing you have to understand about Dubai is nothing is what it seems," she says. "Nothing. This isn't a city, it's a con-job. They lure you in telling you it's one thing and a modern kind of place but beneath the surface it's a medieval dictatorship."
- Frank, Copenhagen, Denmark, 27/10/2009 19:00
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Tory MP Brian Binley is not a reliable source. I was there a decade before 1988 developing oil fields and Dubai was quite a large city, as it had been long before that. I and fellow expats couldn't afford massive sums of rent but were given company owned rather poor accommodation. One night a rat ran across my bed. We gave a lot to the "system" and were not all that well paid then.
- Fred, Horsham, 27/10/2009 19:00
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Believe in conspiracy theories
illuminati are loving this, question is will people wake up in time to stop this ruthless conspiracy (JFK)
Great Depression is coming and then World War 3
And will 'they' get their New World Order
Over my dead body will they
wake up
- Mike Jones, Southampton, 27/10/2009 19:00
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I came back to London earlier this year after working in the Dubai real estate sector. It's true a lot of people have lost money in real estate there, I was selling off-plan property in projects that still haven't started construction and probably won't. I don't feel too much sympathy for the speculators but a lot of buyers were making purchases for themselves or family members, which is sad.
At the peak of the market we were selling for GBP 700 per square foot (more than most locations in London & New York) ...for something that will supposedly get built in 5 years in the middle of the dessert!
- David Charles, London, 27/10/2009 19:00
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Hey, mugs, welcome back to dumpUK. Where next, Shetland?
- Ted, London, 27/10/2009 19:00
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We seem to have this thing were Brits abroad are never to blame. Flip the script, if someone in the UK was to fund a champaign lifestyle of expensive cars, women, parties, apartments, maids etc on credit and loans and then could not sustain the repayments would we have much sympathy for them? Bottom line many people saw Dubai as an easy ticket to a fantasy life, anyone who uses loans to buy luxuries is trying to imitate something that there not. Yes, I have sympathy for the people who went there for a better life and to try there luck, and have now lost there jobs and can no longer pay back ESSENTIAL loans. But for the wannabes I feel nothing, and they should be forced to pay back what they owe, as absconding is the same as theft.
- John, London., 27/10/2009 19:00
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No wonder the World's in a recession. Parties, hotels, and endless credit?
Welcome back to the real Planet Earth folks, enjoy your stay.
- Jock, London, 27/10/2009 19:00
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I was living in Dubai during the peak years.
Made a lot of money there. On the other hand, as a White male I have to say I found the local Arab Emirati to be some of the most brash, gullible and detestable people around. Of course I never saud that to their faces (I know, I know... very Brithish of me 
.
Dubai is a dream (now turned nightmare) built on sand. As long as there is not a concrete industry there, everything will be based upon greedy speculation and artificial tourism.
I had my fun, Dubai can go to hell for all I care!
LOL
- John Mcrowland, London, UK, 27/10/2009 19:00
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- Jere
No taxes - A pint of beer and accommodation is still twice the price of London. My 1mb Internet line with Etisilat is GBP 50 per month ...no taxes ..yeah , right!
Safe - Sheikh Zayed Road is the most dangerous road in the world with several deaths per day, okay not many muggings in Dubai but a death is a death.
Inexpensive food - ?? incorrect - have you heard of Tesco?
Sun - I agree the all round sun is nice.
Beaches - with sewage filled oceans and red tide ..lovely.
Most of Narcissistic Psychopaths gone - No. Dubai is synonymous with the Costa del Sol but worse, there are some of the most dangerous scumbag Russians on earth living in Dubai. Multiple murders with bodies dumped in the dessert happen regularly.
Jere, are you sure you live in Dubai?
- Paul, Dubai, 27/10/2009 19:00
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My heart goes out to Richard. How could such a fun-loving, confirmed-bachelor fall on such hard times. This old man has clearly been sleeping rough for quite some time and now that there is no more building work for him, how will he survive? He might have to sell his Rolex or worse!
- Liam, Brighton, UK, 27/10/2009 19:00
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Ted- do you even read the articles before leaving your "dumpUK" comment? Does it simply save you time reading, comprehending and thinking about the issues involved in a story? Or do you actually think it is orginal and witty? If you think the UK is such a dump you know what you can do and I'll even come around and help you pack!
- Nj, London, 27/10/2009 19:00
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