The number of property companies in significant financial distress has leapt by 35% over the year.
A total of 58,844 firms in the real estate and property services sector were in distress in Q2 of 2020, that had risen to 79,695 in Q2 2021.
The latest Red Flag report from Begbies Traynor said: “Despite the booming residential property market, the whole real estate and property sector – a key indicator of the economy’s performance – has continued to struggle.”
The figures reflect a 6% quarterly decrease from the record highs of Q1, when 85,165 real estate firms were in distress.
Across all industries, county court judgments have leapt by 90% and more than 650,000 UK businesses face “significant financial distress”.
While the total number of businesses in distress has fallen by 10% from Q1, Begbies Traynor said it was still the second highest level ever and a rise of 24% on the same time last year.
Begbies Traynor partner Julie Palmer said: “Although the reopening of the retail and hospitality sector has given the economy a boost in Q2, the number of zombie businesses remains considerable, with many in a fragile state.”
Construction sector firms are also worse off, with 85,376 in distress, a rise of 26%.
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