Property among most indebted sectors in UK

Property has been revealed as one of the most heavily indebted sectors for professionals, according to new research from debt management firm Lowell.

Lowell’s study found that 72% of all self-employed people are in some kind of business debt, whether due to credit cards, unpaid tax bills, overdrafts, or outstanding invoices.

Property ranked as the ninth most indebted sector for self-employed workers, with 77% in some kind of business debt.

This was based on a survey conducted by The Leadership Factor of 500 self-employed UK residents. Respondents were asked to indicate the extent to which they are in debt and by how much.

Among property owners, landlords and letting agents who reported having debt, the estimated average amount owed is at least £33,900 per person, based on the midpoint of each reported debt range.

The most common level of debt was between £501 and £1,000, reported by 29.4% of respondents, while 35.3% had debts of less than £2,000.

At the other end, 29.4% owed £10,000 or more, and nearly a quarter (23.5%) owed £50,000 or more.

"We tend to treat business debt as a sign of operational failure, but for today's self-employed, debt has quietly morphed into essential working capital,” said John Pears, UK CEO at Lowell.

“The standard advice to 'build a three-month cash buffer' simply doesn't hold up when relentless inflation continuously erodes profit margins.

“Until we address payment terms, reform tax structures like Payment on Account, and recognise that self-employed debt is subsidising the broader supply chain, these workers will keep using personal liabilities to absorb the economy's volatility."