The report from audit, tax and advisory firm Mazars found that 738 property businesses had collapsed in the 12 months to 30 September.
That is compared to the 634 property firms that collapsed in the prior year.
The study found that insolvencies were most pronounced among landlords, having jumped by 35 per cent. Meanwhile the number of estate agent businesses going bust rose by 11 per cent, and the number of developers collapsing grew by four per cent.
Spiking interest rate damaging landlords
Mazars noted that interest rate increases had driven up the cost of mortgage repayments, causing some landlords and developers to struggle to pay off their debts, or even to sell off property assets. The drop in sales and rental activity had also contributed to the spike in estate agents collapsing.
Rebecca Dacre, partner at Mazars, noted that the property sector had been “hit particularly hard” over the last few years, which meant that more and more businesses within the industry were “reaching the end of the road”.
She continued: “Landlords are in a difficult position, often carrying large amounts of secured debt which leave them with little room to negotiate, especially as the property market downturn impairs the value of the property.
“Insolvency can be inevitable and within the residential market, will sadly take more and more rental properties off the market and away from prospective tenants.”
The report follows figures from the Insolvency Service last week which found that company insolvencies have hit their highest levels since 2009.
