Company insolvencies rose to 1,878 in February 2026, a 7% increase on January 2026, driven primarily by a growing number of creditors’ voluntary liquidations. Administration and compulsory liquidation appointments also remained elevated.
Administration activity reached its highest level since mid-2024 in January 2026, highlighting increasing distress among larger businesses. At the same time, compulsory liquidations have continued to rise, driven in part by increasingly assertive creditor action, a trend evident across the market over the past 12-18 months. In 2025, compulsory liquidations rose by 15% compared with 2024, reaching their highest level since 2012.
Although the month-on-month rise in insolvencies reflects a challenging operating environment, the data does not present an entirely negative picture. The company insolvency rate (calculated as a proportion of the total number of companies on the Companies House effective register) in the 12 months to February 2026 was 51.5 per 10,000 companies, relative to 52.3 for the 12 months to February 2025.
Recent weeks have brought significant macroeconomic volatility, and businesses are expected to come under further pressure as a result. Disruptions to supply chains, together with rising energy and input costs, are likely to feed through to insolvency figures in the coming quarter.
Within the property sector, there was a general wave of optimism heading into 2026, with conditions ripe for improved transactional volumes amid greater perceived certainty and stability in the marketplace. Recent macroeconomic and geopolitical events have changed the landscape somewhat, and therefore calling the market and predicting the medium-term direction of travel is challenging.
We have, however, outlined certain events that will impact the market throughout 2026.
The Renters’ Rights Act
The Renters’ Rights Act, due to come into force in May, will fundamentally alter the occupation of tenanted residential premises. Most notably, ‘no fault’ evictions will be outlawed, tenancies will shift to periodic (as opposed to fixed term), and there will be restrictions on rent increases.
The Act continues the shift towards a more ‘tenant-friendly’ regulatory environment and is likely to prompt further small and private landlords to exit the market.
Occupational demand for rental residential accommodation remains strong, however the environment in which landlords operate has become ever more challenging.
The impact of the new legislation on pricing for buy-to-let investments is still filtering through into the market, with investors evaluating risk and return.
Lenders will need to closely monitor loan-to-value ratios and their borrower’s portfolio strategies in light of the new legislation.
We have witnessed an increasing number of fixed charge receivership appointments over tenanted residential assets over the last 12 months, which may be further fuelled by the new legislative position.
Commercial properties will have updated Rateable Values (RV) from 1st April 2026.
The impact on the market will differ by sector. At a headline level:
- Industrial & warehousing– Rateable Values have increased to reflect rental growth within the sector since 2021. Occupiers of substantial distribution facilities may witness significant annual cost rises.
- Offices– RVs have generally risen across the sector, with prime city centre offices facing the most pronounced uplifts.
- Retail– Changes are mixed and highly location-dependent. Stronger retail locations have witnessed RV uplifts, while more challenged locations have experienced material reductions.
In addition to updated RVs, there are also impending changes to the multipliers adopted for different property types. Large properties (those with an RV of over £500,000) will now face a higher multiplier, creating a potential ‘double whammy’ for many businesses facing both a rising RV and a higher multiplier.
Whilst there will continue to be targeted rates relief for retail, hospitality and leisure businesses, this may prove insufficient for many, with revised reliefs being less generous than their predecessors.
Businesses are encouraged to closely scrutinise their rating bills and engage specialist support in the event of concern.
A full response to the government’s 2021 consultation on minimum energy efficiency standards in non-domestic properties is still awaited.
Anecdotally, we understand this will be published during 2026.
The minimum rating requirement of a B by 2030 has long been outlined to the market; however, uncertainty remains over whether this threshold will be retained and what interim milestones, if any, will apply.
Earlier this year, the British Property Federation reported that 81% of commercial buildings in major English cities had EPCs rated below B, underscoring the scale of the task ahead.
Set against a broader backdrop of green policy softening in developed economies, the UK’s real estate industry remains in limbo. In a capital-intensive sector where forward planning is critical, the prolonged ambiguity is commercially damaging and has hindered meaningful progress in improving the energy efficiency of commercial stock.
Should the long-awaited government response be provided during 2026, it will bring to an end an elongated period of avoidable uncertainty and potentially unlock significant capital investment.
Please do not hesitate to reach out to a member of the Watling team if you require support with any property assets you may be dealing with.
