More distressed properties on the market in Q1
Friday, 3 June 2011 2:26 PM
The number of distressed properties being placed on the UK commercial property market rose in the first three months of the year, according to research issued today.
According to the RICS Global Distressed Property Monitor, agents in the UK reported a net balance score of +24 in the first three months of the year.
A distressed property is one under foreclosure or being sold by its mortgagee. These properties usually fetch a price below its market value. An increased rate of distressed properties is a negative economic indicator while a decrease may signal recovery.
Net scores are calculated by subtracting the numbers of agents reporting their number of distressed properties falling from the number who reported the level increasing.
Property professionals remain pessimistic about the prospects for the market in the second quarter of 2011, the monitor said, indicating that more distressed properties will come to market, although at a slower pace.
“If inflationary pressures persist, the Bank of England could be forced into a rate hike sooner rather than later, adding more pressure to the distressed sphere,” the monitor said.
“In addition, the pace of investor interest continues to wane creating a significant oversupply of distressed property in this country.”
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