Housebuilders in limbo as delayed infrastructure plans raise overtrading risk
In September 2025, the number of registered company insolvencies in England and Wales was 2,000, similar levels to August 2025 (2,046) and September 2024 (1,967).
The construction industry experienced the highest number of insolvencies in the 12 months to August 2025 at 3,934, making up 17% of all industry cases.
Commenting on the latest construction insolvency statistics, Kelly Boorman, National Head of Construction at RSM UK, said: “The latest insolvency data confirms construction remains the hardest-hit sector, with the highest number of industry insolvencies recorded again in August. While the government continues to push for growth and infrastructure investment as part of its ‘Get Britain Building’ agenda, the reality on the ground is more complex. The combination of high inflation, interest rate uncertainty, and fragmented supply chains is creating a perfect storm for overtrading and under-resourcing.
“Many firms are in limbo as they hold onto larger workforces and absorb additional costs in anticipation of future project mobilisation. However, with key government announcements still pending, volumes aren’t materialising quickly enough to sustain this level of overhead. It’s a double-edged sword, as if businesses trim down too soon and growth comes at pace, they could find themselves stretched too thin and risk overtrading as they try to scale up. As a result, we’re seeing more construction businesses engage with restructuring services, particularly mid-tier contractors struggling to manage working capital and access affordable debt.
“Despite the government’s recent announcement to reform the planning system and accelerate delivery of housing and infrastructure pipelines, there is still a lack of clarity on how volumes will be mobilised and funded. The National Housing Bank has yet to bring meaningful liquidity into the market, and many businesses are operating without the debt support they need to scale safely. For main contractors, there is increasing pressure to protect their supply chains, leading to further tensions and challenges around loyalty, competition and continuity. The availability of affordable debt is also creating further disparities throughout the supply chain, particularly for smaller subcontractors having to absorb greater financial risk due to its uneven distribution and restrictive lending criteria.”
She added: “With the UK still facing the highest inflation in Europe and concerns that the Autumn Budget could push it higher, the construction industry is at a pivotal moment. Private equity and alternative fund investments are increasingly stepping in to fill the gap, support future growth and mitigate the risk of overtrading. However, uncertainty remains towards how quickly this capital can be deployed and whether it will reach businesses across the supply chain. Without targeted measures to ease funding constraints and support mobilisation, housing and infrastructure delivery will continue to face headwinds, compounding the risk of insolvency in Q4 2025.”