As we enter a new year, Watling has reviewed the corporate insolvency statistics for 2025 to ascertain key trends for the last 12 months and reflect on their influence on the property market.
Insolvency statistics over the last 12 months present a relatively stable picture in terms of the total volume of insolvency appointments.
Corporate insolvencies for the 12 months to November 2025 totalled 24,186, representing a very marginal 0.1% uplift on the preceding year.
Delving into the volumes of the different types of insolvency appointments does paint a slightly more nuanced picture, however:
- Administrations: reduction of 5% y-o-y
- Creditors Voluntary Liquidations: reduction of 3% y-o-y
- Compulsory Liquidations: 21% increase y-o-y
- CVA’s: reduction of 6% y-o-y
The reduction in most insolvency processes was offset by an increase in Compulsory Liquidations, suggesting a more aggressive creditor approach to debt recovery, something we have observed anecdotally within the market.
Reflecting on the property market, we have outlined some headline observations from the last calendar year.
Property Transactions
‘Deal friction’ became a buzzword in 2025, with extended transaction timelines commonplace across the property sector for both residential and commercial assets.
Numerous factors contributed, including complex macroeconomic conditions (tariff uncertainty, muted growth, etc.), a restrictive finance market, ongoing planning delays and heightened buyer caution, particularly in the run-up to the November Budget.
As a result, transactional activity / volumes across the commercial property market declined on an overall basis.
Positively, the wider economic picture is expected to support deal volumes into 2026, with factors such as anticipated interest rate cuts, greater certainty following the Budget, and a relatively low risk of recession likely to improve transactional confidence.
Property Development
Development activity was generally subdued across the market in 2025.
Persistently elevated construction costs (predominantly caused by rising labour rates), planning constraints, and a tighter regulatory environment (including the impact of the Building Safety Act) have all contributed to a suppression of activity.
Anecdotally, we have witnessed an increase in enforcement action across residential development sites, with increasing receivership appointments over part-built schemes, consented sites, and sites struggling to secure planning approval. Particularly, we have seen an increase in sites with consented development schemes, where planning was secured 2-3 years ago, and no longer represents a viable development.
Offices
Occupational take-up in the office sector remained below pre-pandemic levels in 2025, although recent quarters have shown signs of improvement.
Net absorption (space taken less space vacated) has been negative for much of the past 3 years; however, 2025 reversed the trend, driven primarily by demand in London. The occupational focus remains on prime city centre locations.
The flight to quality continues to influence occupier preferences, with focus on ‘best in class’ assets. This may gradually ease as a reduced development pipeline directs more demand toward secondary assets.
Watling has been involved with a substantial out-of-town office park portfolio and witnessed first-hand the challenges of dealing with more secondary accommodation, with restricted occupational demand for space which has not been recently completed/refurbished and stubbornly high refurbishment costs and stagnating rents challenging the business case for redevelopment.
Industrial
Market conditions in the industrial sector have remained robust, although growth has moderated following the post-COVID surge.
Whilst vacancy levels increased in 2025, it is expected that this trend will stabilise in the medium-term given the restricted pipeline of new development. In line with wider trends across the property market, investment volumes have stagnated, albeit to a lesser extent compared with other sectors.
Watling has been involved with some significant industrial assets during 2025, and despite certain headwinds (including business rate rises, EPC challenges, etc.), we continue to witness a depth of demand for the sector.
Retail
The retail sector saw several high-profile insolvencies during 2025, including Bodycare, Claire’s, and the River Island Restructuring Plan, to name just a few, with the environment remaining challenging. Retail & wholesale continues to be the sector subject to the 2nd-highest number of insolvencies, behind construction.
2025 continued certain trends we have been witnessing for some time within the sector, including:
- An increasing divergence between retail locations, with prime locations attracting strong interest and competitive bidding scenarios, whilst certain secondary/tertiary locations offer no viable retail use and restrictive alternative use demand.
- Prime pitches continue to contract and become ever more compact.
- The retail park sector continues to evidence robust performance.
- Pockets of activity can be seen with numerous fashion, fast food and particularly convenience food stores expanding.
Looking ahead, a more favourable consumer environment and lower interest rates may boost consumer confidence and purchasing power, supporting occupational demand during 2026.
In summary, we are hopeful of more positive property market conditions in 2026, supported by wider economic factors; however, sentiment remains fragile and international events could easily change the direction of travel.
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.
