A prominent North East property firm has collapsed with debts exceeding £328,000, leading to a pre-pack administration sale to the founder's daughter, newly filed documents reveal.
The Downfall of a Family Business
Jan Forster Estates Ltd, based in Gosforth, fell into administration due to severe financial pressures. According to the administrators' report, the company owed creditors an estimated £328,868. The largest single debt was approximately £280,000 owed to HM Revenue and Customs (HMRC) for historic VAT arrears.
Other significant liabilities included a £35,000 CBILS loan from NatWest and £13,000 owed to the property portal Rightmove. The report stated that unsecured creditors, owed an estimated £134,680.51, are unlikely to receive any payment due to insufficient funds.
Pre-Pack Sale and Restructuring
In a move to salvage the business, administrators Andrew Little and Gillian Sayburn from Begbies Traynor oversaw an accelerated sales process. This resulted in a pre-pack administration deal in which the company's assets were sold to Angela Dennison, the daughter of founder Jan Forster and the firm's former managing director.
Ms Dennison purchased the business through her newly established vehicle, Dennison Property Services, for £55,000, to be paid in ten monthly instalments. Her bid was selected as it was unconditional and was deemed to offer the best potential return for creditors.
The transaction led to significant downsizing. Previously operating from four branches in Gosforth, High Heaton, and Tynemouth, the firm now runs from a single office in Gosforth. At the point of administration, employee numbers had fallen to 18 from 29. While most staff were transferred to the new company, some redundancies were made.
Causes of the Collapse
The administrators' report pinpointed several key factors behind the company's failure. While the lettings and property management arm traded profitably, the estate agency side struggled against intense competition, particularly in the Tynemouth area where around 25 agencies now operate.
The report highlighted that many competitors work with low overheads, without costly high-street premises. Furthermore, the property sales business inherently strained cash flow due to long completion timescales and frequent delays.
Substantial monthly outgoings exacerbated the situation, including roughly £16,000 per month for Rightmove and £6,000 per month for a Client Relationship Management system. The burden of leases for underperforming offices added to the financial pressure.
By October 2025, directors were seriously concerned about immediate cash flow and mounting pressure from HMRC. They feared the company would be unable to meet its payroll obligations for October and November, prompting the call to administrators.
Commenting on the deal, Angela Dennison said: "This business has been part of my family's life for two decades, and I am committed to honouring that legacy while shaping a stronger, more focused future. The restructuring allows us to stabilise the business, protect the majority of roles, and continue to provide a high level of service."
Preferential claims from employees for unpaid wages and holiday pay, totalling an estimated £11,945.61, are expected to be settled in full.
