Anxiety for owners of Stewart Milne Group homes amid administration

Homeowners of Stewart Milne Group properties say they are “anxious” about their futures after the company went into administration.

Stewart Milne, who founded the business in 1975, said he was “devastated” after the Group collapsed into administration on Monday.

Administrators Teneo informed staff of their redundancy with 217 jobs lost and employees told they would not be paid for some hours completed before Christmas, workers said.

Teneo said it was working with the Redundancy Payments Service to support employees in recovering “any statutory entitlements to which they may be entitled”.

Stewart Milne Homes Brackenhill Park - Hamilton — Stewart Milne Homes Brackenhill Park – Hamilton STV News

For homeowners across the Group’s active developments, there is a feeling of anxiety about the future as news of the administration came as a “shock”.

Kevin O’Connor, who moved into a development in Hamilton a year ago has a snag list of around 20 defects needing fixed.

“There’s a bit of anxiety because we obviously don’t know what happens, ” he told STV News, “These things aren’t that common.

“Having spent a lot of money, like our neighbours, on these houses, it’s a little difficult to swallow.

“We don’t know what to do about it. It’s costly to fix things, especially when you don’t have the skills of the trade to do it.

“So naturally, we’ll have to probably spend a good bit of money finishing off our house, even though you would expect it to be like that to begin with.”

Janine Conlin, who moved into the same development two months ago, told STV News: “We’re just really shocked given they were still doing viewings on the weekend, they’ve been very active in terms of the building next door. So, it was quite a shock to find out that was happening.”

Homeowners on properties developed by the group say they are 'shocked' by the news. Photo: Stuart Milne Group. — Homeowners on properties developed by the group say they are ‘shocked’ by the news. Photo: Stuart Milne Group. Stewart Milne Group

Claire Blaikie, a homeowner in Dunnottar Park in Stonehaven, said: “I think, while having half-built houses in the estate, if they are going to get completed, are if they’re going to be a safety hazard?

“And getting the roads completed as well, because my road currently is still a little bit of a mess.

“So it would be good to just get that completed.”

It is understood that no further building works will take place and that customers who have reserved a property with the Group and have not yet moved in will be contacted.

Teneo Financial Advisory Limited, the appointed joint administrators, said customers who currently live in a Stewart Milne property and are concerned about outstanding building works should contact them at SMHomeowners@teneo.com.

Jane McNicol, senior associate at property law experts Macnabs Solicitors, said: “The company, although it’s no longer trading, has gone into administration rather than liquidation. So the administrator takes over the company’s obligations for the time being.

“You should therefore contact the administrator as soon as possible, or if you have any doubts about what your rights and remedies are, you should get in contact with the solicitor to take advice.”

The Stewart Milne Group has its headquarters in Aberdeen with offices in, Edinburgh, Glasgow and other UK bases.

It has been in significant debt for more than a decade.

Lloyds Banking Group said the collapse followed several years of special agreements, including multiple extensions on its debts.

A spokesperson for Lloyds Banking Group: “When a company experiences financial difficulties, we will always try to find a solution that places the business onto a sounder financial footing without the need for any insolvency process.

“Unfortunately, despite several years of support and forbearance, including multiple maturity extensions to the borrowing, this has not been possible in this instance.

“We will now work with the administrators, as they consider the best options for the business.”

A sales process was run by the firm from May last year but directors made the decision to put each of the Stewart Milne companies that operate active development sites in Scotland into administration.

The Group has faced “significant challenges” in recent years, with financial uncertainty related to rising interest rates, cost increases and a reduction in consumer confidence.

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In a statement on Monday, Mr Milne said: “I am devastated by this totally unexpected outcome of the sale process and struggling to accept it, given the profound impact it will have on employees, sub-contractors, suppliers and customers.

“Stewart Milne Group was up for sale and, following significant interest, two bids were submitted. The bank has not accepted either bid and withdrawn its funding which left the directors with no option but to appoint administrators.

“I tried everything I could to find a way to achieve a better outcome for the business and the people who depend on it. I believe one of the bids could have delivered a comparable, financial return to administration and, crucially, allowed the business to continue to operate, safe-guarding hundreds of jobs and protecting livelihoods.”