New research suggests that the estate agency industry has bucked the nationwide trend of business liquidation that he plagued other sectors of the economy.
An analysis by GetAgent has found that the number of property companies entering liquidation actually decreased during the pandemic when compared to the years preceding it.
The research focuses on both registered compulsory liquidations and registered creditors' voluntary liquidations within the Real Estate Activities Sector (Section L; Division 68) which includes the buying and selling of own real estate, the renting and operating of own or leased real estate and real estate activities on a fee or contract basis.
A compulsory liquidation is one that is forced upon a company by the courts, while a voluntary liquidation occurs when the directors of a struggling company, in agreement with the shareholders, choose to place the business into liquidation as a way of paying off its debts.
GetAgent’s analysis of liquidations found that, during the pandemic - which it takes as the first quarter of 2020 to the third quarter of 2021 inclusive - the number of all liquidations in the Real Estate Activities Sector in Great Britain totalled 494.
This is down 18 per cent when compared to the same time frame prior to the start of the pandemic - that is, when compared to the second quarter of 2018 to the end of 2019.
This pandemic silver lining for property professionals has been driven by a notable fall in the number of companies being forced into liquidation, with compulsory liquidations down 57 per cent.
However, there has been a marginal two per cent uplift in the number of property companies making the tough decision to seek voluntary liquidation.
GetAgent chief executive Colby Short says: “The property market has never been stronger and so while the last two years have been tough on all of us, at least we’ve had some consistency and stability across our professional lives, albeit we’ve had to adapt and evolve with Covid rules and regulations.
“Government support schemes such as furlough will have gone some way in helping many property businesses weather the initial storm and any financial instability. However, since the market reopened and the additional boost of a stamp duty holiday was implemented, we’ve hardly paused for breath.
“It’s clear that the property sector is thriving on all fronts and that is certainly one silver lining from an otherwise very tough period in our lives.”
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Spot the subliminal word in the headline.
Across the country the number of company insolvencies are lower, e.g. for July 2021 they were 24% lower than July 2019, but this is largely due to the restriction on creditor's actions in the Corporate Insolvency and Governance Act 2020. As restrictions are eased will we see a surge in insolvencies or is the 'thriving property sector' sufficiently robust to resist?
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