Self-employed property professionals are more likely to have business-related debt than the wider self-employed workforce, according to research by debt management company Lowell.

The study found that 77.27% of respondents working in property and real estate had some form of business debt, compared with 72% across all self-employed sectors surveyed.

Property ranked ninth among the industries examined, behind sectors including financial services, legal services, hospitality and transport delivery.

The findings highlight the financial pressures facing self-employed workers in the property industry, where irregular income, delayed payments and substantial operating costs can create cash flow difficulties.

PROPERTY DEBT LEVELS

Among property sector respondents with business debt, the estimated average amount owed was at least £33,900, calculated using the midpoints of the debt ranges reported in the survey.

However, debt levels varied considerably. The most frequently reported amount was between £501 and £1,000, accounting for 29.4% of indebted respondents, while 35.3% owed less than £2,000.

At the other end of the scale, 29.4% reported debts of £10,000 or more, including 23.5% who owed at least £50,000.

The research covered business liabilities including credit card balances, unpaid tax bills, overdrafts and outstanding invoices.

Lowell identified several potential sources of financial pressure within the property sector, including mortgage borrowing costs, taxation and expenditure on repairs, insurance and regulatory compliance.

For landlords, rental arrears and void periods can further disrupt cash flow, while property managers and letting agents may face delays in receiving fees or other payments.

LATE PAYMENTS LEAD FINANCIAL CONCERNS

Late payments were the most frequently cited cause of financial stress among property professionals, identified by 27% of respondents.

The absence of sick pay and seasonal fluctuations in income were each mentioned by 18%, followed by tax bills at 14% and unpredictable demand at 9%.

Across the wider self-employed workforce, Lowell found that nearly three-quarters of respondents carried business debt, with some reporting liabilities exceeding £100,000.

The company suggested that borrowing was increasingly being used to manage the gap between income and expenditure, rather than solely to finance business expansion.

John Pears, UK chief executive of Lowell, said: “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.

“What these numbers really expose isn’t reckless borrowing which can often be associated with debt, but rather a systemic cash-flow trap built into the UK economy.

“Independent workers are effectively acting as interest-free banks for the sectors they serve. When corporate clients stretch payment terms to 90 days, HMRC demands tax on profits that haven’t even materialised, and non-negotiable overheads like vehicle leases, fuel, or business rates continue to pile up regardless of seasonal lulls, debt becomes the only bridge across the gap.

“The standard advice to ‘build a three-month cash buffer’ simply doesn’t hold up when relentless inflation continuously erodes profit margins. For an independent delivery driver or a boutique legal practitioner, taking on debt is an unavoidable part of the job.

“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.”