There has been a surge in the number of property industry firms reporting ‘critical’ financial distress, the UK’s leading corporate rescue firm has revealed.
Begbies Traynor says there was a 12% rise in the number of companies significantly struggling within the real estate and property management sector.
The figures is within the firm’s ‘Red Flag Alert’ report which provides a regular quarterly snapshot of the nation’s corporate health, saying increasing numbers of businesses across many sectors including estate agency are struggling as the economy heads towards major tariff and tax regime changes.
Overall, As of 31 March 2025, 45,416 businesses were in ‘critical’ financial distress – a 13.1% rise versus Q1 2024.
Leisure and retail firms are facing the strongest headwinds as many consumers cut back on discretionary spending but are only just ahead of companies within the property industry for financial stress levels.
Julie Palmer, Partner at Begbies Traynor, says: “As we progress through 2025, optimism remains in short supply for UK businesses.
“The first quarter of the new year started positively with unexpected economic growth figures, positive retail sales and cooling inflation – and that is reflected in our latest data.”
NI increases
Ric Traynor, Executive Chairman of Begbies Traynor (main image), adds: “The recent increases to both employers’ national insurance contributions and the national minimum wage is likely to result in increased distress levels later in the year as many marginal businesses struggle to absorb further cost inflation.
“Ultimately, if the current pressures on businesses do not ease over the next 12 months, Red Flag Alert’s data points to a large number of these critically distressed businesses progressing towards formal insolvency.”