Today’s report on the administration of Heworth Green Developments and other recent business failures contrasts with other successes from the partnerships of John Neal and Stephen Ellis and their companies North Star (York) Limited and Neal Investments Ltd.

The two people/ businesses can take credit for their role in delivering successful projects within the City of York.

North Star (York) Limited, which gives its address as Rougier House, Rougier Street, currently lists three directors, according to Companies House. They are Martin Chambers, Paul James Ellis and Stephen James Ellis.

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Neal Investments Ltd, which went into administration last August, also lists three directors, John Howard Neal, Olivia Claire Neal and Victoria Jade Duckworth.

In 2020, the two companies worked together to deliver the Malmaison Hotel, when its former developer fell into administration just prior to the Covid crisis.

Last year, North Star also bought Swinson House, the former tax office in Piccadilly, which will be demolished and replaced with a 132-bed hotel. Neal Investments were also involved.

A year ago, North Star also submitted plans to City of York Council concerning the former TK Maxx to create a Hard Rock Café and hotel. John Neal and Neal Investments were also involved. Despite planning approval being granted last summer, the scheme has yet to be built.

North Star and Micklegate Developments also successfully completed the demolition of former Jinnah Restaurant, Minster Car and van Hire and Bar 127 buildings to create a 62-bed hotel. With financial backing from Neal Investments, it was successfully handed over to Supercity to build.

North Star also bought the former Entertainer store in Coney Street.

North Star also teamed up with Grantside to demolish the former Mecca bingo site and build student flats on the site, construction of which is currently underway.

This all comes as the UK construction sector is facing an “immensely difficult period” after 4,370 construction companies went bust over the past year, according to new data.

Auditing firm Mazars said the sector has experienced the highest number of bankruptcies of any industry in the UK for the past three years.

In the year to the end of November, 4,370 companies went insolvent compared to 4,086 in 2021/22 and 2,481 in 2020/21.

This reflected a seven per cent increase in insolvencies from 2021-22 and 76 per cent in 2020-21 due to high material and labour costs.

The auditing company said higher borrowing costs have hit the profit margins of ongoing and upcoming development projects.

Mark Boughey, a partner at Mazars, said: “There are now on average a dozen building companies going under every single day in the UK.

“One problem is that the commercial viability of a lot of today’s projects was assessed three or four years ago, with fixed price contracts often being negotiated. Since then, costs have spiralled, while buyers’ appetite has taken a dive.

“Construction contractors operate on very tight margins at the best of times – the sector is really being squeezed at both ends.”

Bankruptcies were mainly caused by specialised activities such as demolition, electrical and plumbing – which accounted for 58 per cent of all bankruptcies.