R3 report: Yorkshire insolvencies fall during 2025

The figures show insolvency activity, which includes administration and voluntary and compulsory liquidations, decreasing by 9.9% across Yorkshire and the Humber in 2025.

The fall was the second highest in the UK, with only Greater London, with an 11% drop, seeing a bigger reduction.

Areas seeing a hike in insolvency activity included Northern Ireland and Wales, which reported the largest increases at 20.2% and 11.7% respectively.

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But while insolvency activity decreased in Yorkshire last year, the region’s performance in terms of new business start-ups was less positive. New start-ups In Yorkshire fell by 8.4%, with 49,605 new businesses registered in 2025. Only Northern Ireland saw a bigger drop in the number of new businesses, down by 35.3% to 10,781.

New business growth rate was highest in Wales (+8.7%, 22,863 new businesses) and Scotland (+4.2%, 39,027 new businesses).

The R3 Annual Business Health Report, compiled using data from Creditsafe, also looks at sector trends across the UK, with the national picture indicating a fragile operating environment for many local businesses.

Construction continued to account for the highest number of insolvency activities in the UK in 2025 (4,584 cases), despite a modest reduction of 6% on the previous year. The sector was exposed to rising material costs, delayed payments, skills shortages and weak investor confidence.

Wholesale and retail (4,124 cases) and accommodation and food services (3,831 cases) also saw elevated insolvency activity numbers, reflecting pressure on margins as households reined in discretionary spending and businesses struggled to absorb or pass on higher costs.

Manufacturing insolvencies remained historically high with 2,188 cases, as companies contended with energy costs, supply chain disruption and subdued export demand.

Dave Broadbent, chair of R3 in Yorkshire and partner at Begbies Traynor Group in York, said: “Despite the drop in insolvency activity locally, the R3 report shows that businesses, both regionally and nationally, are struggling to regain their footing in 2025 after several years of economic challenges.

“While inflation has now eased, the cumulative impact of higher costs, tighter credit conditions and weak demand continues to place significant pressure on local companies, particularly smaller and mid-sized firms with limited financial headroom.

“As we move into 2026, while cashflow and profit margins remain under pressure, seeking professional advice at an early stage from an R3 member can make a critical difference, giving viable businesses the best chance of survival and recovery.”