Property Development: Insolvency
The question
To ask the Secretary of State for Housing, Communities and Local Government, what steps his Department is taking to help support homeowners who face delays in property sales due to unresolved title restrictions related to developers in liquidation.
Answered by Matthew Pennycook
Most new build homes are issued with a 10-year new-build warranty which may protect homeowners against builder insolvency leading to failure in completing the build. Some warranties cover the buyer’s deposit in the event the buyer has exchanged contracts off-plan, and the developer becomes insolvent before completing the build.
Where developers face financial difficulties before development is completed, we would expect local authorities to work with administrators to help unblock sites and restart housing delivery to complete the development. As part of their responsibilities local authorities should consider how to mitigate risks around infrastructure delivery including looking at the timing of infrastructure completion on site and considering whether it is appropriate to require developers to set aside bonds which can be used to complete infrastructure should the developer be unable to do so.
Land may become ‘ownerless’ where a developer has become insolvent and then liquidates. The Law Commission announced on 4 September 2025 that they will undertake a project on ownerless land as part of their 14th Programme of Law Reform, which will aim to clarify the law in this area.
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