The number of UK property companies falling into insolvency has soared in the past few months, as investors who were weakened by the pandemic now face being killed off by rising interest rates.

In the first three months of the year, 81 property investment companies fell into insolvency, according to tax and advisory firm Mazars. That is the highest quarterly figure in more than a decade and a sharp increase on the 46 companies which went insolvent in the final three months of 2021. 

Among the most at-risk businesses are those which took on loans to fund speculative development projects before the pandemic struck and commercial landlords who lost out on income when shops were closed during lockdowns. 

Now they face an existential threat in the form of rising borrowing costs, as the Bank of England moves to rein in soaring inflation by raising interest rates — the BoE’s Monetary Policy Committee has tightened policy in five back-to-back meetings, taking the benchmark rate to 1.25 per cent.

“With so much rent still in arrears and creditors increasingly coming knocking, the recent series of interest rate rises could not have come at a worse time. Unfortunately, further rises are likely to follow — which means the sector is likely to see further insolvencies,” said Rebecca Dacre, a partner at Mazars.

Some businesses have only survived until now only because borrowers have been protected by government coronavirus measures. But a moratorium on issuing winding up petitions came to an end earlier this year, meaning lenders are no longer obliged to show forbearance. 

Line chart of The number of businesses becoming insolvent is at its highest level in more than a decade showing Property company insolvencies surge

Having survived coronavirus, investors had hoped that they could recover lost earnings and catch up on delayed projects against a backdrop of economic recovery. 

But the invasion of Ukraine has tipped the global economy ever-closer to recession, stoking a cost of living crisis which has weighed on high street spending and raising the prospect of a housing market slowdown in the UK. 

Property developers are also grappling with rising labour and material costs due to wage inflation, high energy prices and supply chain disruption. 

Separate research by accountancy firm Price Bailey shows a sharp jump in the number of businesses in the construction sector which have defaulted on government loans designed to prop up small businesses during the pandemic. 

Businesses in the construction industry made 14,255 Coronavirus Business Interruption Loan Scheme, or CBILS, claims. So far, 354 businesses have defaulted, representing 2.5 per cent of the total, according to the firm.

The rate of default in the construction sector is far higher than in other sectors, and is likely to herald more insolvencies to come, according to Price Bailey. 

“The full impact from the three big shocks of Brexit, Covid and Ukraine is yet to come. The current increase in insolvencies largely relates to businesses that were likely to fail before the various supply side shocks experienced by the UK economy,” said Matt Howard, head of insolvency and recovery at Price Bailey.

This story originally Appeared on Yahoo