House sells for just 50 PENCE as U.S. property market hits all-time low

Now a detached home in the U.S. city of Detroit has been sold for just 50p.

Its fate sums up the American housing market, where prices are in freefall - victims of the sub-prime mortgage scandal that helped trigger the global credit crunch.

And with Britain facing recession, some experts fear the same drastic price-cutting could happen here.

Bargain: Desperate to sell, the bank that owns the house in Detroit has put it up for sale for 50p

The Council of Mortgage Lenders has warned repossessions are running at more than 100 a day, with 45,000 repossessed homes predicted to be on the market by December.

The Detroit property was bought for £40,000 less than two years ago, but repossessed when its owners defaulted on mortgage payments.

Left empty, squatters moved in and stripped out plumbing, the boiler and light fixtures.
Anxious to dump the property, the bank listed it for sale at £500 - but after six months had no takers.

With taxes and bills mounting, the price was lowered to $1 - the equivalent of 50p.

Even then, it took 19 days to find a buyer. The new owner is a local woman who will not live there, but considers it an investment.

While it's not unusual for such a small amount to be exchanged when property is transferred for legal reasons, listing a home for 50p is almost unheard of.

Kent Colpaert, the listing real estate agent for the property, said: "I've never seen a home listed for $1. But it's been hit hard: It's just a shell."

So desperate was the bank owner  to unload the property that it agreed to pay £750 in sales commission and another £500 bonus for closing the 50p sale, the bank will also will pay £250 of the buyer's closing costs.

With the back taxes and a water bill, and unloading, the house will cost the bank about £5,000.

Dollar property sales are the financial hangover from the foreclosure crisis as lenders that made loans to unqualified buyers during the height of the subprime market now find themselves the owners of whole neighborhoods of vacant, deteriorating homes.

Anthony Viola of Realty Corp. of America in Cleveland said: "No one has much sympathy for these banks that made subprime loans,

"And in some cities like Cleveland, judges aren't letting them sit on the properties -- they're ordering them to tear them down or sell them."