According to Property Portfolio Rescue’s (PPR) UK Distress Index Q1 2009, desperate sellers hit an all-time high with enquiries up +118% in 12 months to December 2008, which PPR believes is a lead indicator of potential rises in repossessions, liquidations and unemployment within the UK economy.

Other key findings are that unemployment is set to exceed three million before the end of 2009, repossessions are set to reach 82,000 in 2009 and in Q2 2009 company liquidations are expected to push 6,000.

An inevitable consequence of the increase in repossessions and liquidations is an increase in unemployment, with PPR enquiry levels a reliable indicator of unemployment figures, three quarters ahead.

Nick Hopkinson, director of PPR, said: “This quarterly distress index shows a massive increase in the number of distressed sellers recently facing repossession. The biggest issue driving enquiries is the immense pressure that businesses and landlords are being put under by their banks. The index is a very real indicator of an ever-worsening cycle of distress, resulting in unemployment exceeding three million before the end of the year.

“While we believe this index trend is a reliable indicator of future repossessions and in turn liquidations and unemployment over the coming year, this is just the tip of the iceberg in terms of the number of businesses currently in trouble – many of whom are seeing falling revenues, rising debts and unpaid creditors.

“Government initiatives are welcomed but have come too late to help small businesses that were showing signs of distress six months ago and are now at a point of no return. We urge business owners to act at the first sign of cash flow problems and look to restructure debt as soon as possible.”