INSOLVENCY departments at banks and major accountancy firms are gearing up for a significant increase in work this autumn, warns Sheffield-based insolvency specialist Daren Bekisz.
The Grant Thornton recovery and reorganisation partner says the preparations are the clearest indication yet of the scale of business difficulties.
"Unfortunately, this feels like just the beginning," said Mr Bekisz. "The negative sentiment expres
sed in a huge range of economic indicators is now feeding through to the real economy, with businesses that a year ago had been able to paper over the cracks now being fully exposed.
"House building is almost dead in the water at present, with jobs within the industry disappearing by the day. We have seen examples of property companies preferring to lose their deposit rather than complete on land purchases. As a gauge for the wider economy, this is not good news."
Mr Bekisz says banks have started hedging their bets, forming companies to buy up properties at significantly reduced values, indicating problems are likely to continue in the housing sector.
Mr Bekisz issued his warning as the Government's Insolvency Service revealed the number of companies placed into administration in the second quarter of the year was 60 per cent higher than during the same period last year and nine per cent up on the previous quarter.
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