Property firms are the most likely businesses in the UK to be in financial distress, with estate and letting agents in the most trouble.
Business restructuring and insolvency specialist Begbies Traynor said yesterday that 16% of all UK businesses – 484,00 by number – are now in “significant distress” as at the end of March.
Executive chairman Ric Traynor said that for the second year running the hardest hit sector was property, with a 13% annual increase in the number of companies in “significant financial stress”.
He said that the total number of property companies affected was 48,182 at the end of the first quarter of this year.
He said: “Within this sector, companies involved in buying, selling and letting took much of the hit with a 16% increase in significant distress to 36,018.”
The numbers are very much higher than those supplied by other sources – for example, Rightmove talks about some 20,000 branch members in total, considerably fewer than the 36,000 agency businesses said to be in possible financial trouble.
Companies House shows around 22,000 businesses registered which call themselves ‘estate agents’. Some 2,415 companies calling themselves ‘estate agents’ were registered last year.
However, companies do vary markedly as to their business descriptions when they register at Companies House. Some do not call themselves ‘estate’ or ‘letting’ agents at all.
Begbies Traynor – which has acted in a number of cases where agents have gone into administration – said yesterday that construction has also suffered in the property sector, with 10% more companies in significant financial distress compared with last year.
Financial services is another sector picked out as seeing increasing levels of significant stress.
Begbies Traynor said that many UK businesses are in limbo, with consumers holding back on big ticket purchases – such as houses.
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