Insolvency rate to soar
THE number of corporate and personal insolvencies in the North West is set to leap at a “catastrophic” rate in the next 18 months, it was forecast today.
A survey, conducted by R3, the insolvency trade body, reveals that practitioners in the region expect the number of business insolvencies in the UK to rise 34% by 2009.
R3’s North West regional chair Matt Dunham said: “The predicted 34% increase in business insolvencies from 2007 to 2009 is catastrophic and unfortunately will mean we will start to approach the numbers we saw at the peak of the last recession in 1992.
Around 50 of the region’s insolvency practitioners took part in the poll, which was part of a national survey carried out in conjunction with polling agency ComRes
Matt Dunham said: “There is a growing trend in the UK for unsecured lenders to move up the chain, an activity banks such as Northern Rock have been practising. It is now not just non-payment of a mortgage that can lead to repossession of homes unfortunately. This practice goes some way of explaining why the repossession figures are going up.”
The vast majority of North West practitioners also expect secured lender repossessions to rise by the end of 2009, with 60% ent expecting them to ‘increase a lot’ and a further 26 per cent to ‘increase a little’.
“In a tough financial situation, more and more lenders will find themselves with bad debts, with limited routes open to them,” said Matt Dunham. “This is sadly an inevitable consequence of overlending in a formerly buoyant market.”
Practitioners in England, Wales and Northern Ireland as a whole expected to see personal insolvencies rise from 121,796 in 2007 to 132,700 in 2008 to reach 148,352 by the end of 2009.
Mr Dunham added: “The battle for credit has been lost and there is no way out of what is coming.”
