Fears are growing over a surge of cowboy builders after more than 4,000 construction firms collapsed in 12 months.

Rogue traders, who are believed to cost the economy around £10bn a year, could take advantage of the void left by thousands of legitimate companies shutting down.

The Federation of Master Builders (FMB) is concerned the high number of insolvencies could lead to a rise in cowboy builders offering work at “unrealistically cheap rates”.

A third of homeowners are put off doing major home improvement works because they fear hiring a cowboy builder, according to FMB.

The government’s Insolvency Service figures show subcontractors have been the worst affected with 2,499 insolvencies over the year-long period.

Wirral-based The Accountancy Partnership, who manage the finances for around 13,000 clients nationwide, has seen a 112% increase in clients working in the trades since 2021.

Managing Director Lee Murphy said: “This increase suggests there is growing demand for expert support and guidance on how to navigate the financial responsibilities of self-employment.

“We hope that all construction workers, from builders to plumbers, are as vigilant in their work as they are with their accounts.”

Construction firms have closed at the fastest rate in 10 years due to high inflation rates, house building slowing down and spiralling costs, according to Financial Times.

One of the biggest firms to cease trading is the Buckingham Group, who worked on Anfield Stadium and the HS2 railway, which collapsed last month with the loss of nearly 700 jobs.

Brian Berry, Chief Executive of FMB, said: “It’s troubling to see that insolvencies are at their highest rate in 10 years.

“It is a difficult time in the market, with nearly 50% of our members expecting to have lower profits this year and 20% cutting back on recruitment.”

“With the rise in insolvencies and costs on the up for business and consumers alike this may lead to a rise in cowboy builders looking to offer work at unrealistically cheap rates.

“The FMB champions the industry campaign to license building companies.

“This would implement minimum standards for someone to call themselves a builder and provide consumers with increased protection from rogue traders.

“We would fully support any moves by the Government to introduce licensing in the industry.”

A Department for Business and Trade spokesperson said: “We understand the increased financial pressures on the construction sector.

“We’re working hard with industry to help manage these costs by collaborating with the Construction Leadership Council to provide advice and guidance.

“We are also backing small and medium enterprises in the sector with £1.5 billion through our Levelling Up Home Building Fund and we have also introduced legislation to reduce delays and costs for housebuilders.”

NOTES TO EDITORS

Chris Bradley

PR Manager at The Accountancy Partnership

Email: chris.bradley@theaccountancy.co.uk

Phone: 020 3355 4047

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