Insolvency figures highlight commercial property collapse
Figures released by the Insolvency Service point to a collapse in the commercial property market, according to insolvency trade body R3.
The statistics which show a 53% increase in receiverships, up from 177 in the second quarter to 270 in the third quarter, indicating that repossession of commercial property is on the increase.
"Companies buying or selling property are being squeezed by a reduction in prices and a shortage of buyers," said R3's North West regional chairman Matt Dunham, of BDO Stoy Hayward LLP. "We have all known for some time that the property and construction sector has been badly hit by the downturn, and these figures are evidence of that."
The figures show the number of administrations also rose to 1,007, up from 938 in the second quarter. Overall, the number of corporate insolvencies for just three quarters of 2008 now stands at 15,164.
"The overall number of insolvencies has increased dramatically due to the credit crunch and the crash of 2008," added Dunham.
"The rise in administrations – which are a turnaround rather than a termination tool – illustrates that insolvency practitioners are using this method which was not available in previous recessions in an attempt to create a more positive outcome for businesses. The figures show that UK plc is in very poor shape and the malaise is likely to continue till the end of 2009."
