Real estate investment insolvencies more than double

Insolvencies of real estate investment companies increased by 120% during 2022, from 112 insolvencies a year earlier to 246. Analysis from accountancy firm Mazars also showed that insolvencies of estate agents increased by 86%, from 126 in 2021 to 234 in 2022.  The firm said real estate investment companies suffered from the hikes to the UK base interest rate, which meant a sudden rise in the cost of servicing debt. Such companies tend to be more leveraged than many others, the team added. Refinancing debt has also become more difficult in the past year and rolling over loans with an existing lender or re-banking with another became harder for companies in financial distress.  Rebecca Dacre, partner at Mazars, said: “Real estate investment companies are often highly leveraged and have been hit hard by the steep rise in interest rates. Unfortunately, with the state of the UK property market expected to worsen, there could be many others that suffer the same fate. “Companies in the real estate sector have been badly impacted by unpaid rent during the pandemic while still having to pay their own costs.” With the UK property market in decline, other segments of the real estate sector are falling into financial difficulty. Insolvencies of real estate owners/operators increased by 37% in the last year, from 176 in 2021 to 241 in 2022. Demand for office space has also fallen considerably since the pandemic began. To send feedback, e-mail akanksha.soni@eg.co.uk or tweet @EGPropertyNews Image © Alex Hinds/imageBROKER/Shutterstock