Key findings of the latest index published today include:
* Long-term mortgage arrears driving jobless working-class into repossession;
* Supply/demand imbalance of prime properties sees slow in inquiries from top-end sellers;
* Unemployment is set to reach three million before the end of 2009;
* Repossessions set to exceed 67,000 in 2009;
* Q3, 2009 company liquidations are expected to exceed 6000.
With ongoing reports of rising unemployment and growing repossessions, PPR said it was continuing to experience an influx
of inquiries from distressed sellers looking to secure the fast sale of their residential property.
Most sellers (in excess of 3400 in Q2 of 2009) are in long-term arrears, unable to make the necessary mortgage repayments.
Inquiry levels from distressed sellers have been growing month on month since the beginning of 2008, as individuals, landlords and small businesses are forced to sell their home or residential property assets to avoid future repossession or bankruptcy.
Nick Hopkinson, Director of Property Portfolio Rescue, said: "While our business primarily looks to assist sellers at the mid to top end of the market, our latest Distress Index reflects continuing problems for the forgotten mass market of working-class homeowners.
"These owners are trapped by a combination of surging unemployment, reducing household incomes, growing negative equity and increasing mortgage costs, with no chance of securing a competitive, new mortgage rate. At PPR, we are continuing to experience a growing number of inquiries from homeowners at the bottom end of the market, who are desperate to sell and have nowhere else to go.
"Over the last few weeks we have seen improved optimism among those selling prime properties. This has been driven by a combination of very limited supply and an increased demand from wealthier buyers looking to re-enter the market. As a result, we have seen a recent drop in distressed seller inquiries from top end property owners, particularly in London.
"Inquiries from Financial Advisors and Mortgage Brokers on behalf of clients, who may have lost their jobs or are suffering from reduced or negative equity, have surged in the last quarter. More than 10% of the total inquiries we received in the Quarter Two of 2009 were from these introducers – this is 185% up on the same time last year, as more people fail to get further mortgage finance and struggle with debt.
"This is clear evidence that for most people today’s mortgage market is effectively closed; you need a huge deposit and a perfect credit rating to stand a realistic change of securing a mortgage. Government and bank-led initiatives aren’t working
"The Government and bank-led schemes designed to help the most financially vulnerable are clearly not working to address the real issues.
"It has been widely reported that a pitiful number of homeowners have actually been saved by the much trumpeted Government
schemes. Meanwhile, while repossessions may be growing at a slower rate than previously feared, serious arrears are surging. The current forbearance being shown by banks is only delaying the inevitable.
"Further, the banks are currently all increasing their mortgage rates. I would like to see the taxpayer-owned banks forced to offer more competitive mortgages to those who need them most."
And Hopkinson predicted more property market pain next year.
"Unemployment is surging and the wider recession will continue to grind on until the major banks have repaired their balance sheets and re-open for lending to businesses and homeowners, evaluating applications against more normal risk criteria," he said.
"Against this reality, we will see any short-term signs of recovery in the housing market petering out or stagnating at best."
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