Homeowners ‘cannot pay debts’

The level of distressed homes coming onto the market will increase over the next quarter as owners struggle with debt management in the wake of the credit crunch, it has been predicted.

Timothy Lambert, the sales and marketing manager for consultancy Ducalian, said that the property market is in a “mess” and that lenders cannot count on people being able to pay back debts.

“We are not out of the woods yet and many homeowners are behind on mortgages by several months,” he remarked, adding: “Until the financial markets calm, banks cannot simply rely on promises of payments.”

This will lead to a rise in the amount of repossessions and homes being sold at auction, he noted, suggesting that property investors may be able to capitalise on the situation and purchase distressed homes.

Recently, Hometrack reported that the level of new buyers registering their interest with estate agents increased by 17.1 per cent during February.

By Jamie Price