# Uncertain Times for UK Landlords: How to Avoid Insolvency for Your Property Management Business in 2020
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2020-11-16
Category: BUSINESS
Category URL: https://financedigest.com/category/business
Meta Title: Property Management Legislation in Troubled Times
Meta Description: Discover the legislation and financial strategies to keep your property management business afloat during challenging times. Contact insolvency experts in
URL: https://financedigest.com/uncertain-times-for-uk-landlords-how-to-avoid-insolvency-for-your-property-management-business-in-2020html

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The last few years or so have seen certainty and stability for UK businesses go straight out the window in a spectacular way. The uncertainty that Brexit created threw a wrench in the wheels of an already fickle market, and when COVID-19 hit, chaos was kicked into overdrive.

As a result of all the turmoil at the start of 2020, many homeowners decided to start selling property out of fear of a potential market crash. Many landlords were also put in a tight spot, with unevictable tenants under lock-down not making their rent payments. A wave of layoffs has also incentivized workers with limited savings to sell their property.

Overall, all the way through Q2, many people seemed to prefer [having a bit more cash on hand](https://www.landlordtoday.co.uk/breaking-news/2020/3/how-to-successfully-navigate-the-property-market-in-uncertain-times?source=newsticker) rather than property whose value could drop or whose tenants could cause unresolvable issues. The market picked up in Q3, with the average price of a home reaching £250,000 for the first [time since the troubles](https://www.financedigest.com/why-manufacturers-mustnt-lose-their-green-focus-in-troubled-times.html "WHY MANUFACTURERS MUSTN’T LOSE THEIR GREEN FOCUS IN TROUBLED TIMES") began back in 2016.

Now, with the second wave of COVID-19 well underway, the [market’s ground](https://www.financedigest.com/ground-support-equipment-gse-tires-air-market-to-grow-rapidly-during-the-forecast-period-2018-2028.html "Ground Support Equipment Gse Tires Air Market to Grow rapidly During the Forecast Period 2018 – 2028") to a screeching halt once more. The whopping 7.5% year over year increases of the summer months had been impressive indeed. However, experts warned that this type of [growth could not be sustained](https://www.financedigest.com/robot-operating-system-market-is-witnessing-a-sustainable-growth-due-to-increase-in-demand-scrutinized-in-the-new-analysis.html "Robot Operating System Market is witnessing a Sustainable Growth Due to Increase in Demand Scrutinized in the New Analysis"). They were proven right by the meager 0.3% increase of average property [prices between September and October](https://www.financedigest.com/uk-house-prices-show-unexpected-strength-in-october-nationwide.html "UK house prices show unexpected strength in October: Nationwide").

Overall – [times are tough](https://www.financedigest.com/building-economic-resilience-in-tough-times.html "Building Economic Resilience in Tough Times") for tenants, landlords, and investors. So what can [property management](https://www.financedigest.com/how-to-get-started-in-the-world-of-property-management.html "How to Get Started in the World of Property Management") companies do to remain solvent in such troubled times?

### **Get in Touch With an Expert**

Legislation helping [businesses cope with the repercussions of the pandemic is getting passed all the time](https://www.financedigest.com/cfos-its-time-to-own-the-business-model.html "CFOs: It’s time to own the business model"). The Corporate Insolvency and [Governance Act](https://www.financedigest.com/factbox-governments-act-to-ease-inflation-pain.html "Factbox-Governments act to ease inflation pain") of 2020, a.k.a. CIGA, is an example of such legislation. CIGA has introduced measures and procedures that could help companies in financial distress caused by the [economic crisis](https://www.financedigest.com/new-pm-rishi-sunak-pledges-to-lead-britain-out-of-economic-crisis.html "New PM Rishi Sunak pledges to lead Britain out of economic crisis"). It has provided [companies with new opportunities for recovery – and it’s not the only piece of legislation that businesses](https://www.financedigest.com/keeping-an-eye-on-company-purse-strings-where-do-businesses-go-wrong.html "Keeping an eye on company purse strings – where do businesses go wrong?") can call upon to avoid insolvency.

Due to the difficult situation property management businesses find themselves in at the moment, you need to be aware of each and every last bit of legislation that can help you. Being informed about what you can do to remain solvent should be your highest priority. The easy way to do so would be to get in touch with experienced [insolvency practitioners in London](https://www.hudsonweir.co.uk/) and avail yourself of their counsel.

### **Don’t Take on More Debt**

Insolvency is directly related to debt. If you have a lot of debt already, it’s a good idea to avoid accumulating more. Doing this is especially crucial if your creditor has a history of being inflexible or uncooperative with their debtors. If you do take on more debt, make sure you do so with creditors who are willing to negotiate, compromise, and [restructure debt](https://www.financedigest.com/sri-lanka-to-unveil-debt-restructuring-plan-to-creditors.html "Sri Lanka to unveil debt restructuring plan to creditors").

### **Acquire Funds**

If you find yourself strapped for cash, it may be a good idea to try to acquire funding via a [bank loan](https://www.financedigest.com/ant-group-starts-to-differentiate-consumer-loan-business-jiebei-from-bank-loans.html "Ant Group starts to differentiate consumer loan business Jiebei from bank loans"). Ideally, you should only do this if you [lack funds for your operations or to satisfy pressing debts](https://www.financedigest.com/cineworld-plunges-as-lack-of-blockbusters-adds-to-debt-woes.html "Cineworld plunges as lack of blockbusters adds to debt woes") in the short term but are reasonably sure that’s only a temporary state of affairs.

Another way to deal with empty coffers is to liquidate some assets. Experts claim that the [growth in property prices experienced in Q3 of 2020 is unsustainable](https://www.theguardian.com/business/2020/nov/06/uk-house-prices-jump-as-average-home-tops-250000-for-first-time-covid) – and statistics appear to back that claim as well. Brexit is also looming on the horizon, and the [COVID-19 crisis](https://www.financedigest.com/the-aftermath-of-covid-19-cybersecurity-crisis-have-the-attacks-benefitted-the-industry-more-than-they-hurt-it.html "The Aftermath of COVID-19 Cybersecurity Crisis: Have The Attacks Benefitted the Industry More Than They Hurt It?") hardly seems to abate, either. These factors do not bode well for the state of the UK [housing market](https://www.financedigest.com/uk-housing-market-keeps-momentum-but-slowdown-ahead-halifax.html "UK housing market keeps momentum but slowdown ahead: Halifax") in the next couple of months. With this in mind, liquidating some assets may not be such a terrible idea.

### **Restructure your own debt**

In light of the current situation, you should not consider taking [steps to restructure debt](https://www.financedigest.com/exclusive-naftogaz-ceo-prepared-to-step-down-if-it-would-facilitate-debt-deal.html "Exclusive-Naftogaz CEO prepared to step down if it would facilitate debt deal") only when faced with insolvency. In fact, looking for opportunities to do so should constantly be on your “to-do” list. Even if you [don’t](https://www.financedigest.com/people-dont-like-to-be-told-no-when-it-comes-to-finance.html "People don’t like to be told no when it comes to finance") currently find yourself in dire financial straits, it pays to get in touch with creditors and try to renegotiate your debt.

On the other hand, if you are actually facing insolvency, there are programs in place in the UK that could [relieve some of the financial pressure](https://www.financedigest.com/how-communication-technology-can-help-relieve-pressure-on-staff-in-the-financial-services-sector.html "How communication technology can help relieve pressure on staff in the financial services sector "). Find out what they are and how you can avail yourself of them.

### **Restructure Debtors’ Obligations**

Both companies and private citizens enjoy some [extraordinary government protections right now](https://www.bbc.com/news/business-53851945). You [need to know](https://www.financedigest.com/setting-up-a-business-in-the-uk-heres-what-you-need-to-know.html "Setting up a business in the UK? Here’s what you need to know.") exactly what those protections cover when dealing with tenants so that they don’t take undue advantage of you.

All businesses amass debt, and property [management companies are particularly vulnerable](https://www.financedigest.com/finding-it-hard-to-recruit-good-it-security-managers-dont-leave-yourself-vulnerable-to-attack.html "Finding it hard to recruit good IT security managers? Don’t leave yourself vulnerable to attack") to bad debt at the moment. It may be a good idea to reach out to your debtors, especially those whose payments are past due and try to hammer things out. Restructuring their debt may be the only way to get some of it paid.

### **Implement Secure Business Practices**

If you think you are in danger of insolvency, make it a point to avoid unnecessary financial [risks](https://www.financedigest.com/is-2022-the-year-green-finance-incorporates-climate-risk.html "Is 2022 the year green finance incorporates climate risk?"). Be especially diligent when researching and considering investments. Do more [due diligence](https://www.financedigest.com/why-due-diligence-is-so-important-for-direct-debit-customers.html "Why due diligence is so important for Direct Debit customers") on your clients as well as your creditors to make sure they can be reasoned with if push comes to shove. Finally, don’t let social distancing [rules stop you from networking and devising plans](https://www.financedigest.com/plan-c-uk-pm-johnson-not-planning-further-covid-rules-despite-omicron-growth.html "Plan C? UK PM Johnson not planning further COVID rules despite Omicron growth") for the future.

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