A Deloitte report reveals the number of companies going into administration has jumped 16% so far this year as the credit crunch bites into British businesses, warning things will get worse.

As the value of land stocks fall together with house prices and mortgage approvals, property and other housing-related businesses are recording the highest number of administrations – up 54% in the first half of 2008 on the same period last year.

Proposals put forward by the European High Yield Association for reform of the insolvency regime has ignited political debate and Neville Kahn, Deloitte reorganisation services partner, notes the vast majority of administrations involved small companies.

‘However, with the worsening economic environment, there will be increased pressure from creditors for larger companies to enter...administration,’ he said. ‘As a practitioner, my view is that improvements could be made to the insolvency legislation to create a more stable platform for working out larger administrations. The current administration process works wells for small businesses but this is not the case for larger companies where financing has become ever more complex.’