The number of property companies in significant financial distress saw the highest year-on-year percentage increase compared to other sectors in 2019, a new report shows.
According to insolvency firm Begbies Traynor, the number of real estate firms in financial distress increased by 13% between Q4 2018 and Q4 2019 from 47,147 to 53,159.
In particular, the number of property investors – those buying and selling assets – in significant distress increased by 30%.
Begbies Traynor said in its Red Flag Alert report that a decline in construction output and pre-General Election and Brexit uncertainty were factors in the increase.
The report also showed that across all industries in the UK, the number of businesses in significant distress stood at nearly 500,000 in 2019, the highest number since records began.
Property was among four industries flagged as having been particularly badly affected last year.
Julie Palmer, partner at Begbies Traynor, said: “Businesses and the UK economy as a whole will want to avoid a repeat performance of 2019, where distress increased to record levels on the back of ongoing uncertainty around Brexit.
“These figures clearly demonstrate the impact of this indecision, and with political certainty and a clear Brexit path, UK businesses should, at last, be able to plan for 2020 with a greater sense of clarity.”
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