One of Britain's biggest housebuilders, Berkeley Homes, is threatening to sue customers for up to £100,000 each after they failed to honour sales contracts.
The developer has already taken their deposits of up to £60,000 a time, meaning many have lost their savings.
Now 83 buyers say they will be forced to make themselves bankrupt if they are pursued for more money.
The buyers are paying the price of a gamble they took when property values appeared to be rising inexorably.
In 2007, as the market soared, hundreds agreed to buy flats from Berkeley Homes at Caspian Wharf in Docklands, and Royal Arsenal Riverside in Woolwich, that had yet to be built - known as buying off-plan.
They bought these homes, now finished, for set prices of up to £600,000 and each paid a 10 per cent deposit.
They hoped the properties would have risen in value when it came to paying the balance two years later.
But as the credit crisis sparked a slump in the housing market, the finished apartments are now being valued at up to 40 per cent less.
The problem has been made worse by banks pulling 90 per cent mortgage deals and refusing to lend the buyers enough to complete on the original deals.
As a result, 83 of them have been forced to default on their contracts. Most are private homebuyers, not investors.
Berkeley Homes is legally entitled to keep their deposit and sue them to recover the difference between the original price agreed and the price at which the property can now be sold.
Berkeley chief executive Tony Pidgley has now written to housing minister John Healey urging him to lend buyers government money to buy the flats - or, alternatively, force nationalised banks to make larger loans.
The Government has refused to get involved in what it sees as a contractual dispute.
Many buyers claim they have been asked for financial information which they fear the company is using to assess how much money they could recoup from suing them.
The Standard has seen letters Berkeley has sent buyers, suggesting they ask richer family members to remortgage their homes to raise the cash.
Steven Dowd, 30, and Helen Glanfield, 43, were forced to default and forfeited their £80,000 life savings.
In 2007 they paid deposits on two two-bedroom flats in Caspian Wharf valued at £375,000 and £415,000.
Berkeley has now put the properties on the market at much lower prices, and written to them warning it will pursue them for as yet undecided "damages". Given current market values, this could total £160,000.
Mr Dowd said the stress has ruined his health and left him struggling to hang on to his job. "We have no more savings," he said.
Nick Raynsford, former housing minister and MP for Woolwich, where many of the buyers live, said he had discussed the issue with Berkeley.
He said: "While homebuyers have legal obligations, it is unreasonable to expect them to bear the full financial loss without assistance from the housebuilder.
"I sincerely hope Berkeley Homes will seek fair solutions which do not harshly penalise individuals who bought in good faith more than a year ago."
A Berkeley Homes spokesman said all buyers had received legal advice about their obligations before exchanging contracts and the firm was continuing "an open dialogue".
He added: "Berkeley Homes has asked purchasers to appreciate they cannot be released from contracts or offered price reductions.
"Manifestly, this would be unfair to those who have been able to complete."
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