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Distressed property prices hint at recovery

Developers and lenders are reporting that prices of part-exchanged and repossessed properties are firming up with sales prices increasing by 3% since October.

Figures from whitehotproperty.co.uk, the corporate property portal run by property specialist movewithus says stabilising prices in repossessed properties is one of the first signs of a wider recovery in property prices.

Based on 2000 recent sales, developers are seeing prices stabilise for part-exchanged properties.

Lenders are also reporting that sales prices for these properties have gone from 91% to 94% of the marketed price over the last five months.

Robin King, founding director of movewithus, says: “There are real signs that we have witnessed the bottom of the so-called distressed property market.

“Whilst there are still tens of thousands of repossessed properties coming through in 2009, the likelihood is that this number will fall quickly and the discount to market value will be much less due to the lower interest rates and lenders starting to offer more realistic mortgage products.”

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