Other findings include:
• Repossessions dip in Q2 2009 but 402,640 mortgage loans are now in arrears – driving distressed sales.
• Unemployment is set to exceed three million next year Homeowners coming off fixed rates struggle to remortgage with reduced equity and fall further into serious long-term loan arrears (402,640 in Q2 20092).
PPR said its inquiries continued to be an accurate lead indicator for future repossessions, one quarter on. Based on this
trend, repossessions are predicted to reach 60,000 by Q4 2009.
Small businesses continue to suffer funding problems and many are forced to take the decision to sell property assets to survive. An increase in inquiries from distressed businesses is a reliable predictor of company liquidations, two quarters on.
Linked to mortgage arrears, property repossessions and company failures, unemployment continues to rise. PPR inquiry levels are a reliable indicator of unemployment figures, three quarters ahead. Unemployment is expected to exceed three million next year.
Nick Hopkinson, Director of Property Portfolio Rescue, said: "Recent property surveys reporting a house price rally are based on very low transaction levels and cherrypicked lending to high earners with huge deposits. Unfortunately, this is creating a false picture of recovery. While shortage of property stock within Greater London is pushing up prices at the moment, the UK as a whole has not seen positive growth and many homeowners are increasingly facing negative equity and difficulties remortgaging as they come off fixed rates. Many mortgage brokers are contacting PPR because their clients can’t get a re-mortgage and need to sell fast."
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