Construction Finance

​ Company insolvencies in England and Wales increased slightly in July 2026, with 1,931 companies entering formal insolvency such as administration or liquidation. This was 5% higher than in June 2026, but 5% lower than in July 2025. Creditors’ voluntary liquidations (CVLs) continued to make up the bulk of company insolvencies, accounting for 78% of all cases in July. The number of CVLs was 9% higher than in June, but remained 3% lower than in July 2025. Compulsory liquidations also increased slightly in July, rising by 4% compared with June, although they were 11% lower than in July 2025. Administrations fell sharply, dropping 33% compared with June and 19% compared with July 2025. This was mainly because June’s figures were affected by around 60 connected companies in the property sector entering administration. Administration numbers have been unusually volatile this year. Around 260 connected real estate companies entered administration across March, April and June, which has had a substantial impact on the headline totals. There were 22 company voluntary arrangements in July. This was 57% higher than in June and 83% higher than in July 2025, although CVA numbers remain very low by historical standards.What Is The Trend? Taken as a whole, the figures do not suggest that insolvencies are beginning to rise again. The 5% increase from June is within normal monthly variation and the total was still 5% lower than a year earlier. There are also some signs that insolvency volumes are easing compared with the very high levels seen in recent years. The average monthly number of CVLs during the first seven months of 2026 was 7% lower than the 2025 average, while compulsory liquidations were 6% lower. More broadly, average monthly company insolvencies during 2026 have been 6% lower than the monthly average recorded over the preceding three years. This has mainly been driven by lower numbers of CVLs. So, while insolvency levels remain high, the current picture looks more like a period of stabilisation than a renewed upward trend. The wider business environment has not changed significantly. Many companies continue to face pressure from employment costs, energy prices, borrowing costs, weak demand and historic debt. However, these pressures are not currently translating into a fresh surge in formal insolvencies. Our experience earlier in 2026 was that HMRC had increased enforcement activity against companies with tax debts that had been allowed to build up over a long period. This included winding-up petitions and greater use of enforcement officers. Such action can often become the immediate trigger for either a compulsory liquidation or for directors to place a company into creditors’ voluntary liquidation. For now, the July figures suggest that insolvency levels remain relatively stable, with some evidence that the very high levels of company liquidation seen in recent years are gradually beginning to come down. 

​​Company insolvencies in England and Wales fell in June 2026, with 1,845 companies entering a formal insolvency process.This was almost unchanged from May 2026, when 1,849 insolvencies were recorded, but 10% lower than the 2,048 recorded in June 2025.The figures included 1,364 creditors’ voluntary liquidations, 276 compulsory liquidations, 191 administrations and 14 company voluntary arrangements. There were no receivership appointments.Creditors’ voluntary liquidations continued to account for the majority of company insolvencies, making up around 74% of all cases.However, the number of CVLs was 3% lower than in May and 15% lower than in June 2025. The average monthly number of CVLs during the first half of 2026 was also 8% lower than the monthly average recorded during 2025.This suggests that the exceptionally high level of voluntary company closures seen in recent years may now be beginning to ease.Compulsory liquidations also fell in June. The total was 2% lower than in May and 15% lower than in June 2025.The average monthly number of compulsory liquidations during the first half of 2026 was 6% lower than the monthly average for 2025.Administrations moved in the opposite direction, rising by 45% compared with May and by 80% compared with June 2025.However, the Insolvency Service said that approximately 60 connected companies in the real estate sector entered administration during the month.Administration numbers were also affected by similar groups of connected property companies entering administration in March and April. Around 260 connected real estate companies entered administration across these three months, meaning the headline increase does not necessarily reflect conditions across the wider economy.Company voluntary arrangements remained relatively rare, with just 14 CVAs recorded in June. This was 44% lower than in May.However, one significant recent example is kitchen retailer Magnet, which proposed a CVA as part of a wider restructuring plan intended to address unsustainable property costs and close 15 underperforming stores.The case demonstrates how a CVA can still be used by a substantial trading business to restructure its liabilities, preserve the majority of its operations and protect jobs.The longer-term figures also indicate that insolvency pressure may be easing slightly.In the 12 months to 30 June 2026, one in 198 companies entered insolvency, equivalent to 50.5 insolvencies per 10,000 companies.This was lower than the rate of 52.4 insolvencies per 10,000 companies recorded during the previous 12-month period.Although insolvency levels remain much higher than during the pandemic, when government support and restrictions on creditor action suppressed formal insolvencies, the current insolvency rate remains well below the peak seen during the 2008-09 recession.The Insolvency Service also noted that, despite increases in March and April, the average monthly number of company insolvencies since November 2025 has been 8% lower than the average recorded over the preceding three years. This has largely been driven by lower numbers of CVLs.Overall, the June figures provide further evidence that company insolvency volumes are beginning to fall.The reduction is not dramatic, and insolvencies remain at historically high levels, but both CVLs and compulsory liquidations are now noticeably lower than they were a year ago.The wider business environment remains difficult. Employment costs, energy prices, borrowing costs and weak consumer demand continue to place pressure on many companies.However, there has been no single major deterioration in trading conditions during recent months. Some of the geopolitical uncertainty that affected business confidence and energy markets earlier in the year also appeared to ease during June, although it is too early to know whether this will result in any sustained improvement.Our experience earlier in 2026 was that HMRC had increased enforcement activity against companies with tax debts that had been allowed to build up over a long period. This included the issue of winding-up petitions and greater use of enforcement officers.Enforcement action can often become the immediate trigger for directors to place a company into creditors’ voluntary liquidation.The recent reduction in both compulsory liquidations and CVLs may therefore indicate either that HMRC pressure has eased slightly or that fewer companies are now reaching the point where formal insolvency is unavoidable.It is still too early to say that the pressure on businesses has passed. Many companies remain heavily indebted and vulnerable to changes in costs, demand or creditor behaviour.Nevertheless, the June figures suggest that the overall direction of company insolvencies is now downward, rather than continuing the increases seen in previous years.