Downturn hits middle class sellers

The middle classes are emerging as the latest casualty of the economic downturn as Property Portfolio Rescue reports that enquiries from middle class home owners have jumped 224% since last year.

The latest data from the Property Portfolio Rescue Distress Index shows that enquiries from distressed selers with properties worth £500,000 or more surged during Q1 this year.

Total enquiries to Property Portfolio Rescue hit 3,321 in the last quarter, compared with 1,949 in Q1 2008.

Small developers have also driven enquiry levels while enquiries from buy-to-let landlords with a small number of properties have fallen off thanks to low interest rates.

Based on its enquiry levels, Property Portfolio Rescue levels is predicting unemployment will reach 3.5 million by Q1 next year and is forecasting that repossessions will exceed 70,000 by the end of 2009.

Nick Hopkinson, director of Property Portfolio Rescue, says: “Enquiries from owners of properties worth in excess of £500,000 have reached record levels as they become increasingly concerned about job security and future income and as a result look to downsize or reduce their debts.”

He adds: “Many of these owners of prime location properties have already experienced previous sales falling through, often several months down the line and are now suffering from the consequent further drop in house prices.

“Previously this group of desperate sellers did not make up a significant proportion of our enquiries, but this recent activity provides a clear indication that the cycle of recession is biting now across the whole UK economy.”