R3 said that second quarter insolvency figures show that although the number of administrations dropped by 10% to 695, the number of receiverships rose by almost 16 per cent to 350.
Jeremy Oddie, North West regional chair of R3 and head of recoveries at Mitchell Charlesworth, said: “Receivership is a process now almost exclusively used in cases involving property businesses. The vast majority of these will be companies or individuals with a property portfolio who have defaulted on their mortgage repayments.
“The figures reflect the intense pressure on landlords, particularly those with retail properties. Many of them will have borrowed money some time ago when interest rates were higher. Not only are they paying over the odds, they are also facing the loss of rental income as tenant companies collapse or properties are left standing empty.”
The figures also reveal that compulsory liquidations rose by almost 20 per cent in the second quarter to 1,290.
Oddie added: “It is likely that HMRC is responsible for most of these liquidations. These are businesses which don’t even have the money to wind themselves up.
Some of them will no doubt have already delayed tax under the Time to Pay scheme. It would confirm our own experience, that HMRC is getting fed up with non-payers and is engaged in a clear-out of ‘zombie companies’.”
Lindsey Cooper, a Manchester-based restructuring partner at Baker Tilly, also argued that national figures showing a drop-off in failures of hotels and construction businesses at a national level was"not reflective of what is happening at a regional level.
She said: “Our experience is a strong contrast to the trend highlighted by the Office of National Statistics.
“Throughout the last quarter we have seen an increase in businesses within this sector now in difficulty. This is particularly prevalent amongst the independent and smaller chains of hotels which have properties in locations that don’t attract natural footfall from either tourists or business travellers.”
Similarly, she added that Baker Tilly's restructuring practice was seeing an increased demand for its services from construction firms.
“Unfortunately, for too long the construction companies we are now speaking to have been buying in their work by taking on projects that provide too low a margin.
"As a result, the smaller businesses in the sector are now paying the price for the contracts they have taken on.”
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