Roydon Cowley began his career working at McDonald’s. It took him 20 years of hard graft and more than a dash of entrepreneurial spirit to build up a successful business and climb his way up the property ladder.

Seven years ago, he became the owner of the Old Rectory, a seven-bedroom Elizabethan mansion with swimming pool and equestrian facilities, set in 35 acres of Leicestershire countryside.

Now Cowley, 42, his wife, Jeannie, 38, and their three children have to leave their home – destination unknown. The family business is in difficulty, Cowley is being chased by the bank and, reluctantly, he is going to have to sell up.

While repossessions have been growing at an alarming rate at the lower end of the market, the effects of the recession have been slower to filter through to the top end. Now, though, they are also beginning to appear at the upper reaches of the market. Exclusive research by Savills estate agency for The Sunday Times, looking at the “three Ds” – death, divorce and debt, all traditional motors of the property market – shows a sharp jump in the last one. Debt was identified as being responsible for 9% of prime property sales in the final months of last year. For most of 2007, it accounted for 2% or less.

“In the final quarter of 2008 and the early part of 2009, debt-related sales have been the biggest feature in the southeast, where they accounted for 16% of all prime sales,” says Lucian Cook, director of residential research at Savills. “They are most concentrated in the £500,000-£2m bracket, which suggests that debt is the biggest issue for those who have overstretched or overmortgaged themselves while working their way up through the middle tiers of the prime housing market.

“They will be the types of buyers who have seen their job security diminish and the equity held in their property at the peak of the market significantly eroded, making it difficult to remortgage and often forcing them to downsize.”

In some cases, such as Cowley’s, it is the sudden downturn in the economy that is to blame. “It took 20 years to build up my business, but just four months to take it away,” he says. His company provides nonsurgical treatments to beauty salons and, though it has been successful – his clients include celebrities such as Tamzin Outhwaite and Michelle Collins – it is suffering from a sharp drop in spending on luxuries. That, coupled with the salons’ lack of money with which to buy equipment, has sent his firm’s turnover crashing from £160,000 a month to a fifth of that figure.

“My ability to earn has disappeared,” Cowley says. “When your business faces problems from areas outside your control, it is hell, especially when it approaches so quickly. Because of the huge reduction in income, I need to reduce my level of debt to the bank.

Although my substantial mortgage payments have come down because of lower interest rates, it’s not going to be enough. We simply have to reduce our outgoings dramatically. It’s sad, absolutely, and I’m facing a disruptive time for my family.”

The house, which is Grade II*-listed, will be hard to part with. Dating to the 16th century and described by Pevsner as one of the best small domestic buildings in the country, it has important architectural features as well as two self-contained flats, five stable boxes and a manège. It is on sale with Knight Frank for £2.25m (01789 297735, knightfrank.co.uk). Cowley, however, is not one to wallow in self-pity. “Even if I had to live in a tin shack, nobody can take away what we’ve had here. We have great memories,” he says. “I am vowing to earn back my money and self-esteem within 18 months.”

While some, like Cowley, are able to keep control of their property and decide the price at which it goes onto the market, others are facing repossession. Among the smarter properties in the hands of the receivers is a £5.5m mansion on Avenue Road, in St John’s Wood, one of London’s smartest enclaves. With 8,000 sq ft of living space, the house has six bedrooms, staff accommodation, a large entertainment room and a pool.

“This is a notable repossession on a highly prestigious road – the place of choice for ambassadors,” says Trevor Abrahamson, managing director of Glentree Estates (020 8458 7311, www.glentree.co.uk), who has invited offers above the guide price by informal tender on behalf of the receivers. “We did a lot of work for them in the last recession in the late 1980s and early 1990s, and now it’s happening again. My job is to get the highest possible price, which they know I will do.”

Understandably, Abrahamson will not reveal who owned the property before it was repossessed – discretion is de rigueur at this level of the market. Bruce Tolmie-Thomson, a partner in Knight Frank’s country department, is also reluctant to name names, though he says he has growing numbers of vendors on his books who, like Cowley, are selling because they have to. Such “motivated sellers”, as he calls them, are finally being matched by “motivated buyers”, many from overseas, which should give hope to anyone who has to offload a property quickly and doesn’t want to give it away.

“There is definitely a market out there now,” Tolmie-Thomson says. “Because of the weakness of the pound against the euro and the dollar, anyone who needs to sell in London has an audience of international buyers. There’s a ripple effect in the M25 region and outwards to the country. Our office recently did eight deals in five days, each worth more than £2.5m.”

As well as owners of struggling businesses, the ranks of motivated sellers are being swollen by those with huge mortgages who have lost high-earning jobs or, in the case of those in the City, the hefty bonuses they had come to rely on. “If your mortgage is £4,000-£5,000 a month and you have gone from earning hundreds of thousands a year to earning nothing, it won’t take long for the need to sell to become clear,” says David Adams, head of residential at Chesterton Humberts estate agency. This level of outgoings, with mortgages of half a million or far more, is not untypical for the type of client Adams deals with. He noticed an increase in distressed sales after the banks started to make people redundant last year.

“I have had people coming to me saying, ‘I have a big mortgage and have lost my job. What do I have to sell at to get me out in six weeks?’ ” he says. “In sales where there are financial difficulties, you almost become like a counsellor, as you sometimes do when you’re selling the home of a divorcing couple.”

As with a divorce, which can also go hand in hand with financial collapse, such sales are sensitive and may require special handling. “There are often conditions specified: the vendors may not want the property advertised because they don’t want neighbours to know the situation,” Adams explains. The agent will then aim to sell privately, targeting a list of potential buyers. “The problem with that is there is often no urgency from the buyer, while the vendor needs a rapid sale,” he adds. “In that case, we may have to advertise purely to create an impetus. If a bank is threatening to foreclose, you have to move quickly.”

Other conditions can include viewings between 9am and 3pm, while the children are at school, because parents don’t want them to know that dad has been made redundant and that they are having to sell their home. If the kids are away at boarding school, the first thing they know about the change in their parents’ circumstances might be when they come to a different and smaller home at the end of term.

Yet there may be a silver lining to this particular cloud, as the financial crisis has led some people in London to move out to more affordable homes in the country. “People often eventually go back to the county they grew up in, but the credit crisis is making some of those affected decide that the time is right to scale things down – and to do it now,” Adams says. “Redundancy or the bank chasing them brings forward lifestyle decisions like these. In some cases, I’ve seen it become a real benefit to a family.”

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