Devonshire Homes goes into administration

Devonshire Homes Ltd has entered administration.

Sarah Collins and Jonathan Marston of Alvarez & Marsal Europe have been appointed joint administrators of the £52m turnover housebuilder, which had previously issued a notice of intention to appoint an administrator.

Devonshire, according to its most recently published accounts for the year to 30 September 2024, employed 77 members of staff. It was set up in the early 1990s.

The firm, which was chaired by former Conservative MP David Heathcoat-Armory, made a pre-tax loss of £137,024 in that year.

The administrators cited two projects under construction included in the administration. They are the 225-home The Grange in Bideford, and St Michael’s Reach in Penzance, which was set to deliver 320 homes.

The administrator said the action relates solely to Devonshire Homes Ltd and other Devonshire branded-developments or associated companies are not effected.

Devonshire in its most recent accounts said it forecast a loss of £1.3m after it “significantly underestimated the build costs to build the designs” on a partly-built scheme it acquired with a high proportion of “timber frame architect-designed bespoke houses”.

It said the development was “outside of its core strategy of building single family new build homes using its standard housetypes.” It said “sites will never be purchased again where the company does not utilise its own housetypes” and therefore the loss was treated as an exceptional item.

It made an in-year loss of £156,099 and a provision of £1.12m was made to recognise the total forecast loss of £1.3m.

The auditor’s report to the most recently published accounts published last October warned there was a “material uncertainty related to going concern”, meaning the firm was facing severe challenges which cast doubt on its ability to operate normally. It said it required “additional funding to support the development of new and existing sites”.

The administrators have been approached for comment.