Press
House surveys show 'false' recovery picture
by David Pawsey
FinancialAdviser 22nd October 2009
Shortage of housing stock is inflating values and giving a false impression of a recovery, according to Property Portfolio Rescue.
The property recovery specialist, which acquires property from firms and landlords looking to swiftly liquidise assets, has seen a surge in enquiries which it said indicates a possible rise in liquidations and repossessions in the future.
Nick Hopkinson, director of PPR, said: "Recent property surveys reporting a house price rally are based on very low transaction levels and cherry-picked lending to high earners with huge deposits.
"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 not get a re-mortgage and need to sell fast."
Mr Hopkinson said PPR had received enquiries from in excess of 3000 property owmers in the third quarter of the year looking for a speedy sale.
He said: "The enquiries data shows that, faced with continued rising unemployment across all sectors, reduced household income and little appetite or ability to get mortgages from potential buyers, many homeowners are currently seeking help in securing a fast sale of their property. PPR anticipates continuing high levels of enquiries this winter against this depressed economic background."
James Carter, proprietor of London-based IFA Independent James, said properties in London had held their value but said anyone looking to buy at the moment should be careful.
He said: "I tell my clients to be sure that they are buying the true value of the property."