Corporate insolvencies in England and Wales showed an uptick in the latest data release from the Insolvency Service for October 2025.
Insolvencies were 2% higher compared with September 2025 and were 17% higher than 12 months previously. Notably, the statistics show a 19% year-on-year rise in Administrations, signalling distress among larger businesses.
Monthly company insolvency numbers during 2025 have been slightly higher than the same period in 2024, albeit slightly lower than in 2023. It is important to caveat, however, that 2023 saw a 30-year high annual number of insolvencies.
Various sectors of the UK economy are facing challenging conditions at present, including leisure and hospitality, given their exposure to consumer discretionary income.
In particular, there have been some concerning headlines for the pub sector during the course of 2025. Research by accountancy practice Price Bailey showed 219 pubs entered insolvency in Q2, followed by 189 in Q3, up from 163 in Q1, with the no. of insolvencies in June being the highest monthly total in over a decade. Further research suggested that 1 in 8 pubs are technically insolvent.
The reasons behind the increase in insolvencies have been well-documented, and include:
- Higher employment costs following National Living Wage and National Insurance Contribution increases;
- Reduction to Business Rates relief increasing property holding costs;
- Weak consumer confidence and depressed discretionary spend;
- Depleted cash reserves leaving limited wiggle room for pub operators.
Whilst challenges do exist, pubs remain a key component of British culture and there remain numerous reasons for optimism within the sector. We are aware of the following trends and opportunities within the marketplace:
- A more streamlined market of pub operators creates opportunities for the stronger players within the sector to cement market share and improve profitability.
- The market for pubs with accommodation is robust. Operators who hold assets which can support customer accommodation are capitalising on this as a key area of growth.
- Wet-led pubs are showing a resurgence. Increased profit margins are being observed due to higher food production costs.
- With interest rates expected to fall, opportunistic buyers are expected to enter the market, increasing liquidity in the sector.
- Pubs which can no longer trade profitably present a redevelopment opportunity. We have dealt with numerous pub assets in recent years, which have lent themselves to uses such as residential and convenience store development, helping to revitalise certain high streets and communities.
During the current cycle, Watling has advised on numerous leisure and hospitality-based assignments, including:
- The disposal of 25 trading public houses
- The sale of 4 holiday lodge parks
- Deployment of our treasury management services on c. 150 Pizza Hut restaurants.
If you require additional details on any of our leisure-based credentials, please get in touch.
