Morlich Homes goes into liquidation due to rising costs and cashflow issues.

Five jobs have been lost, and homeowners have been left in a difficult situation as Elgin-based Morlich Homes Ltd has entered liquidation, impacting various stakeholders.

At a recent board meeting, the north east housebuilder, established in December 2010, decided to initiate the formal liquidation process. Michael Reid, a partner at MHA in Aberdeen, has been appointed as the liquidator as of 23 September, and a report has been sent to creditors, soon to be accessible on the creditor portal. The company’s five employees were let go on the same day.

Mr. Reid highlighted, “Due to escalating construction costs and challenging market conditions, the pace of plot sales significantly declined. Moreover, the construction expenses for Morlich Homes Ltd’s Elgin factory exceeded the estimated amount, resulting in cash flow difficulties.”

He continued, “After a comprehensive evaluation of the available options, Morlich Homes Ltd decided to permanently halt trading just before liquidation to safeguard all stakeholders involved.”

Dean and Kerry Clark, a couple from Nairn, are among those affected, having already paid 80% of their new home’s construction cost to Morlich Homes. Initially scheduled for completion in May, the project faced multiple delays.

Mr. Clark compared Morlich Homes to a previous developer they had engaged with, expressing, “We conducted thorough research on Morlich, and their financial accounts appeared to be in a much healthier state.”

He went on to reveal, “They were registered with NHBC, and the directors assured us that there was protection against liquidation in place. Unfortunately, this assurance turned out to be false, leaving us out of pocket with our home only 65% finished.”

The primary assets of Morlich Homes include the Elgin factory, nine serviced plots with planning permission in Elgin, and a former showhouse in Buckie.

Initial assessments suggest that the proceeds from asset liquidation should be adequate to fully repay secured creditors, with an additional sum remaining for preferred and unsecured creditors. The valuation of these assets will be carried out independently.

Additional assets comprise plant, machinery, and vehicles under hire purchase agreements, along with miscellaneous debtors. Thainstone Specialist Auctions in Inverurie is currently valuing these items for imminent sale.