The collapse in the housing market and the economic slowdown is increasingly taking its toll on middle-class homeowners, a company that specialises in buying properties from cash-strapped sellers said today.
Property Portfolio Rescue (PPR), which describes itself as a property recovery specialist, said more than 3,000 homeowners had requested help during the first three months of the year and that inquiries from middle-class homeowners with properties worth more than £500,000 had soared by 220 per cent since last year.
PPR said many buy-to-let landlords with portfolios of properties were being forced to sell some of their holdings after finding it impossible to refinance mortgage deals. However, the majority of homeowners seeking help from the company were hoping to avoid having their properties repossessed.
The firm said it expected 70,000 home to be repossessed this year, which would represent an increase of more than 60 per cent on 2008. Nick Hopkinson, the company director, said: "This recent activity provides a clear indication that the cycle of recession is really biting now across the whole UK economy."
He said that more small buy-to-let landlords would get into financial difficulties during the course of the downturn because lower mortgage costs were likely to prove temporary.
"When inflation drives interest rates up again, landlords face a mortgage cost timebomb unless they reduce debt now or save against this inevitable reality," said Mr Hopkinson.
Last Thursday, the Bank of England finally ended a five-month period of regular interest rate cuts, leaving the base rate on hold at 0.5 per cent.