Research by estate agent comparison site, GetAgent.co.uk, has found that the number of property companies entering liquidation fell during the pandemic, a silver lining at a time when most other industries have been hit hard due to the financial pressures posed by Covid.
The COVID-19 pandemic has been tough for British businesses with many companies being forced to cease trading under unprecedented economic pressure. The property industry, however, has boomed as a result of various government interventions, such as the SDLT holiday, ensuring that buyers remain incentivised during otherwise uncertain times.
As such, the UK property sector and many of those operating within it have thrived.
In fact, industry 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 (Q1 2020 to Q3 2021), the number of all liquidations in the Real Estate Activities Sector in Great Britain totalled 494.
This total is down -18% when compared to the same time frame prior to the start of the pandemic (Q2, 2018 to Q4, 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%. However, there has been a marginal 2% uplift in the number of property companies making the tough decision to seek voluntary liquidation.
Founder and CEO of GetAgent.co.uk, Colby Short, commented: “It’s fair to say that 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.”