The RICS Global Distressed Property Monitor showed that while the pace at which distressed property is entering the market on a global scale is tapering, the UK is still expected to see an increase in the number of distressed properties coming into the market.
Countries where the number of distressed properties coming to market fell at the fastest pace were Poland, Russia, Canada and Brazil.
The survey also suggests that lenders are becoming less lenient with borrowers, as 13 countries reported that the speed at which lenders start foreclosing has increased. This is up from 10 in Q4 of last year, with the UK and US expecting greater levels of foreclosure.
Simon Rubinsohn, chief economist at RICS, said: “As the global economy continues to strengthen, central banks must begin to address the spectre of rising inflation; a threat which is compounded in some markets by the continuing European sovereign debt crisis. As a result many central banks have either already tightened, or are thinking of tightening monetary policy; a step which brings new challenges for the commercial real estate market. Consequently, the distressed property forecast remains overcast.”
Nicholas Leeming, business development director at Zoopla, said: "While the London housing market is very strong, the rest of the UK remains quite fragile. So while there is a greater influx of distressed properties, the market may not be ready to match that demand.
"On the one hand I doubt that the increase in the number of distressed properties will be matched by demand. However on the other hand this information could make the economy more stable by promoting interest rates to remain low and giving people more time to pay back their mortgage."
