Real estate and property services firms in critical financial distress rose by 6.8% year-on-year (YoY) to 7,641 in Q2 2026.
The number of real estate and property services firms in critical financial distress rose by 6.8% year-on-year (YoY) to 7,641 in Q2 2026, according to BTG’s Red Flag Alert research.
A further 88,855 firms were in significant financial distress, up by 9% from the same period in 2025.
Of the 22 sectors covered by the research, real estate and property services recorded the second-highest number of firms in critical distress and the third-highest number in significant distress.
Businesses involved in letting or operating their own or leased real estate accounted for 39,220 cases of significant distress, up by 12.7% YoY.
The number of property management firms in significant distress rose by 13.4% to 16,475.
Businesses buying and selling their own real estate recorded a 4.8% increase to 15,346, while resident property management firms saw an 8.2% rise to 6,882.
The number of real estate agencies in critical financial distress increased by 11.1% to 411.
However, the number in significant distress fell by 5.4%.
Julie Palmer, managing partner at BTG, said: “The landscape for property companies has been particularly difficult of late.
“Planning delays, regulatory and policy challenges and high costs of borrowing are meaning transactions have slowed dramatically.
“Add to this rising employment costs and continued uncertainty across the economy and it is no wonder estate agents and property management firms are facing tough times.”
Palmer added: “This is having wide reaching impacts on the market, from sales and lettings of existing property to new developments.”
“We are in an environment where the longer companies or developments are left exposed to the market forces, the more we are seeing firms or schemes become insolvent.
“The earlier businesses address their financial distress or the viability of their schemes and portfolios, the more options they may have at their disposal to recover and survive.”
She concluded: “If we are to navigate towards recovery in real estate, construction and the wider property market, the focus must fall on making borrowing more affordable and attractive to buyers, delivering housing in line with demand and budgets and bringing costs down for firms so that schemes can remain profitable.
“If the market remains stagnant for much longer, and uncertainty and low confidence continue to outstay their welcome, we could see more of the real estate firms already facing distress shutting up shop for good.”
