Fear Mounts For High Street Estate Agents

Fears Mount For High Street Estate Agents
There is increasing evidence that high street estate agents are facing their biggest challenge yet.

Although online estate agents still only count for less than 10% of the market, their growing popularity combined with increased competition based on price and a relatively stagnant market is testing the resolve of many agents.

In fact, as recently as the start of July, The Guardian ran a story about how a recent study had found there was a small increase in the number of estate agencies going insolvent with another 7,000 showing signs of financial stress.

Chris Marsden, restructuring partner at Moore Stephens, said: “Insolvencies of high street estate agents are increasing as online competitors continue to chip away at their sales.

“With the ban on letting fees stated to come into force in 2019, estate agents will struggle to pass those fees on to landlords.”

“Some areas in the UK appear to have an excess capacity of estate agents, which could mean there is not enough business to spread around as property transactions stagnate.”

Further Evidence Of Problems

In addition to the report, national estate agency group Countrywide have been in the news a lot recently after issuing a profit warning that saw their share price drop 25%.

The company is known to be struggling with a debt of around £200m and has lost around 90% of its market value since it’s peak in 2014.

More recently,  the Local Data Company told Radio 4 consumer programme You & Yours that the number of physical estate agency branches has fallen in the last year.

Added to this, the number of offices that describe themselves primarily as chartered surveyors has also fallen.

Naturally, there is some debate in the industry as to whether the pressure on high street estate agents is coming from online agents or simply conditions of the broader market.

However, it’s hard to deny that if any industry loses almost 10% of it’s share to a new style of offering it is going to make trading more difficult.

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