London Daily

Focus on the big picture.
Thursday, Sep 11, 2025

Building firms going bust at fastest rate since financial crisis

Building firms going bust at fastest rate since financial crisis

The construction sector, which makes up 7% of the economy, is driving overall insolvencies to a 13-year high, according to data from the Insolvency Service.

Construction businesses are going bust at their fastest rate in a decade, driving the number of company insolvencies to its highest level since the financial crisis.

Rising material costs, staff shortages and plummeting consumer demand are weighing on businesses, forcing them to squeeze their margins to unsustainable levels.

Official figures show that in the second quarter of this year, company insolvencies in England and Wales reached their highest quarterly level since the third quarter of 2009.

In the first half of the year, the Insolvency Service recorded 10,717 company insolvencies.

The construction sector accounted for a fifth of these with 2,094 businesses going bust.

The industry had 1,048 insolvencies in the first quarter of the year, which marked its highest level since the same quarter in 2012.

The industry, which accounts for around 7% of the economy, is especially vulnerable to rising inflation because businesses often operate with slim profit margins.

Construction materials typically account for between 20-25% of the cost of most building projects and the price of core materials, including timber and steel, have rocketed over the past year.



According to figures compiled by the business department, the cost of steel bars rose by 17% in the year to October.

The cost of blocks and bricks has risen by 18% and timber is up 19%.

A recent report by the Federation of Master Builders found that the vast majority - 90% - of its members have been hit with higher costs over the past year.

They are also battling with shortages of key staff, including labourers, carpenters, joiners and bricklayers.

In a sign of the economic malaise plaguing Britain, builders said they were struggling to pass these costs on as clients were pulling projects and refraining from commissioning new ones.

Local builders most vulnerable


Smaller, local builders are especially vulnerable as they are less able to benefit from economies of scale so are more exposed to sharply rising costs.

Mark Wigley, managing director of Osprey Homes, a small-to-medium sized housebuilder in Hertfordshire, said: "It makes the viability of certain projects very difficult, in as much as we have to assemble our financial appraisals well in advance of bidding for new land and that generally takes a minimum of 12 months.

"House prices are not increasingly in line with the costs of our material increases.

"So as a result, the developers are really carrying a lot of additional costs that we're finding it very difficult to absorb within our day to day business."

Mark Wigley, managing director, Osprey Homes


He warned that smaller businesses were at the sharp end of the crisis because they are less able to benefit from economies of scale.

"If we're not careful, then houses will just be built by the big PLCs who are only really interested in these massive development sites," he said.

"So these little infill plots, where we are able to demonstrate high quality, will just cease to exist.

"We employ a lot of people within the construction industry and the wider economy.

"So the ripple effect of anything that happens to our industry is quite significant."

Newsletter

Related Articles

0:00
0:00
Close
The British legal mafia hit back: Banksy mural of judge beating protester is scrubbed from London court
Surpassing Musk: Larry Ellison becomes the richest man in the world
Embarrassment for Starmer: He fired the ambassador photographed on Epstein’s 'pedophile island'
Manhunt after 'skilled sniper' shot Charlie Kirk. Footage: Suspect running on rooftop during panic
Effective Protest Results: Nepal’s Prime Minister Resigns as Youth-Led Unrest Shakes the Nation
Qatari prime minister says Netanyahu ‘killed any hope’ for Israeli hostages
King Charles and Prince Harry Share First In-Person Moment in 19 Months
Starmer Establishes Economic ‘Budget Board’ to Centralise Policy and Rebuild Business Trust
France Erupts in Mass ‘Block Everything’ Protests on New PM’s First Day
Poland Shoots Down Russian Drones in Airspace Violation During Ukraine Attack
Brazilian police say ex-President Bolsonaro had planned to flee to Argentina seeking asylum
Trinidad Leader Applauds U.S. Naval Strike and Advocates Forceful Action Against Traffickers
Kim Jong Un Oversees Final Test of New High-Thrust Solid-Fuel Rocket Engine
Apple Introduces Ultra-Thin iPhone Air, Enhanced 17 Series and New Health-Focused Wearables
Macron Appoints Sébastien Lecornu as Prime Minister Amid Budget Crisis and Political Turmoil
Supreme Court temporarily allows Trump to pause billions in foreign aid
Charlie Sheen says his father, Martin Sheen, turned him in to the police: 'The greatest betrayal possible'
Vatican hosts first Catholic LGBTQ pilgrimage
Apple Unveils iPhone 17 Series, iPhone Air, Apple Watch 11 and More at 'Awe Dropping' Event
Pig Heads Left Outside Multiple Paris Mosques in Outrage-Inducing Acts
Nvidia’s ‘Wow’ Factor Is Fading. The AI chip giant used to beat Wall Street expectations for earnings by a substantial margin. That trajectory is coming down to earth.
France joins Eurozone’s ‘periphery’ as turmoil deepens, say investors
On the Anniversary of Queen Elizabeth’s Death: Prince Harry Returns to Britain
France Faces New Political Crisis, again, as Prime Minister Bayrou Pushed Out
Murdoch Family Finalises $3.3 Billion Succession Pact, Ensuring Eldest Son’s Leadership
Big Oil Slashes Jobs and Investments Amid Prolonged Low Crude Prices
Court Staff Cover Up Banksy Image of Judge Beating a Protester
Social Media Access Curtailed in Turkey After CHP Calls for Rallies Following Police Blockade of Istanbul Headquarters
Nayib Bukele Points Out Belgian Hypocrisy as Brussels Considers Sending Army into the Streets
Elon Musk Poised to Become First Trillionaire Under Ambitious Tesla Pay Plan
France, at an Impasse, Heads Toward Another Government Collapse
Burning the Minister’s House Helped Protesters to Win Justice: Prabowo Fires Finance Minister in Wake of Indonesia Protests
Brazil Braces for Fallout from Bolsonaro Trial by corrupted judge
The Country That Got Too Rich? Public Spending Dominates Norway Election
Nearly 40 Years Later: Nike Changes the Legendary Slogan Just Do It
Generations Born After 1939 Unlikely to Reach Age One Hundred, New Study Finds
End to a four-year manhunt in New Zealand: the father who abducted his children to the forests was killed, the three siblings were found
Germany Suspends Debt Rules, Funnels €500 Billion Toward Military and Proxy War Strategy
EU Prepares for War
BMW Eyes Growth in China with New All‑Electric Neue Klasse Lineup
Trump Threatens Retaliatory Tariffs After EU Imposes €2.95 Billion Fine on Google
Tesla Board Proposes Unprecedented One-Trillion-Dollar Performance Package for Elon Musk
US Justice Department Launches Criminal Mortgage-Fraud Probe into Federal Reserve Governor Lisa Cook
Escalating Drug Trafficking and Violence in Latin America: A Growing Crisis
US and Taiwanese Defence Officials Held Secret Talks in Alaska
Report: Secret SEAL Team 6 Mission in North Korea Ordered by Trump in 2019 Ended in Failure
Gold Could Reach Nearly $5,000 if Fed Independence Is Undermined, Goldman Sachs Warns
Uruguay, Colombia and Paraguay Secure Places at 2026 World Cup
Florida Murder Case: The Adelson Family, the Killing of Dan Markel, and the Trial of Donna Adelson
Trump Administration Advances Plans to Rebrand Pentagon as Department of War Instead of the Fake Term Department of Defense
×