Why Receivership matters for Property Market Renewal

I began my surveying career in September 2016, just two and a half months after the Brexit referendum. The sector has since faced a stream of unpredictable events: the Covid-19 pandemic, conflict in Ukraine and the Middle East and last year’s change of government. With Labour preparing a late Budget for November, the only certainty is that instability continues to shape the market.

So, it is perhaps no surprise that having begun my career in receivership, I have not only been kept busy but have seen an uptick over the years. However, many lenders are holding off appointing receivers over their assets, hoping for a more stable selling environment. As a recent Financial Times article observes, falling commercial property valuations have triggered covenant pressures for borrowers, while lenders increasingly adopt ‘extend and pretend’ refinancing tactics to avoid crystallising losses.

With private capital now playing a far larger role in lending than it used to, and having less patience than institutional bodies, investors are starting to demand action. Pressure to deliver returns will push some lenders to recognise losses and move assets on. The next phase of adjustment is here.

Our receivership data shows this market shift. In 2024, we were appointed over 218 properties, almost one per working day. By the end of October 2025, that figure had risen nearly 50% to 297. Most of these appointments are still residential, but the commercial element has grown from 15% of our instructions last year to 29% this year.
The reasons for this are varied but interconnected. The most visible distress is in the office sector, particularly among secondary buildings. As leases approach breaks or expiries, tenants are regearing, downsizing or vacating. Landlords face difficult choices: invest heavily to reposition buildings for the post-Covid environment or wait for them
to become vacant and consider alternative uses.

Conversion to residential use might appear tempting, especially with permitted development rights offering a route through planning, but the reality is complex. Buildings with deep floorplates or poor natural light are challenging to reconfigure, while location plays a decisive role. Even when viable, developers need low gearing and patient finance, as lenders are wary of long phased disposals. Office-to-residential works only when the fundamentals align.

Other sectors are also showing strain. Owner-occupied industrial units face mounting cost pressures and off-pitch retail properties, some long vacant, are struggling to attract interest. Rural holdings are affected by higher financing costs and regulatory change. More buy-to-let portfolios are also entering receivership, a sign that tighter margins, increased compliance demands and reduced tax efficiency are squeezing even experienced investors.

Despite the challenges, there are encouraging signs. The proportion of receivership assets sold has risen, reflecting buyer appetite for well-priced opportunities. Investors are now more discerning, but that discipline is healthy, showing a return to fundamentals such as location, specification and potential for value creation.

With interest rates stabilising and pricing rebased, conditions are emerging for strategic acquisitions. Investors with capital and conviction have a chance to invest in property with genuine asset management potential. Meanwhile, if government rhetoric on planning reform and housing delivery translates into meaningful action, it could help unlock development and underpin confidence.

Receivership is often viewed solely through the lens of distress, but it plays a vital role in renewal. By redistributing underperforming assets to those better placed to reposition them, it helps reset values and stimulate growth.

Uncertainty may still define the market, but for proactive lenders and opportunistic investors, this new phase could be the start of a healthier, more rational cycle.

Alexandra Ward is a senior associate (recoveries and receivership) at Allsop.

This article was first published in Property Week on 19th November 2025. Read full article here