An investor who reneged on his contract with property developers cannot be forced to honour the agreement as he is now facing bankruptcy, the High Court has ruled.

In 2007, Belfast resident Neil Rowe agreed to buy a soon-to-be finished property in a trendy area of Belfast. Mr Rowe paid a deposit of £26,000 for the £264,500 flat but has since lost his job and cannot get a mortgage.

Developer Titanic Quarter Ltd sought a court order demanding that Mr Rowe honour his contract and pay the remaining £238,500 left on the property.

At London’s High Court, Mr Justice Deeny refused to grant the order, ruling that Mr Rowe had "a clearly arguable case" that it would be impossible for him to pay.

While Mr Justice Deeny refused to grant Titanic Quarter Ltd a legal order, or specific performance, forcing Mr Rowe to pay, the developer will still keep the initial deposit and up to £30,000 in possible damages for breach of contract.

"Our client was never trying to get out of what he knew was a legal obligation, but he was facing genuine difficulties,” claimed Mr Rowe’s legal team. "If the banks wouldn't grant him a mortgage because he had been made unemployed then clearly he could not complete the purchase.”

The case will be reviewed next month when Titanic Quarter Ltd will detail their wish, or not, to proceed with an action for damages against Mr Rowe.

Since 2008, falling property prices and a lack of job security have left many investors in a similar position to Mr Rowe. Those being chased by developers should seek legal advice before it is too late.