New analysis from an insolvency firm which monitors levels of financial distress across the UK economy has claimed that 2,893 estate agents were experiencing financial distress at the start of this year, up 13% from 12 months ago. One-third of these are forecast as unlikely to be trading in three years’ time.
These businesses all have at least one ‘red flag’ against their name, which Begbies Traynor said was a warning sign “that indicates around 33% are unlikely to still be trading in three years’ time”.
Estate agents in London have seen the most marked increase in distress over the period, the firm said, with 980 firms in financial distress, up 19% on the year.
Julie Palmer, a partner at Begbies Traynor, said: “From April’s shake-up of Stamp Duty and the recent clampdown on letting agent fees revealed in the Autumn Statement, to the phasing out of buy-to-let tax relief from April 2017, the sector can’t seem to catch a break.
“Despite continued house price resilience, estate agents, especially those in London, have had a particularly challenging time, impacted by low transactional volumes, weak buyer and seller confidence, as well as fierce competition from online rivals such as Purplebricks, eMoov and Tepilo.”
The business has sharply accelerated its forecasts of the number of agents being in financial distress, from a quarter to a third, in the space of just one month.
In December, Begbies Traynor data suggested that 25% of estate agents across the UK had financial problems – an 11% rise on a year ago. However, it said then that the worst could be over.
One quarter of UK estate agents ‘in financial distress’, warns insolvency firm
I think Begbies might have underestimated the number by quite a margin; one of the motivators for seeing through all the shenanigans of portaljuggling, portalbumping and now portalzombies [listings returning from the dead to avoid detection (or so they thought)] is to get a clear idea of what is happening, who is doing what and offering support to agents who need or ask for it.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Gotta love Friday 13th
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
This isnt becuase of online agents its because of lack of leadership over Brexit. No one is putting their house on the market. Online also suffering.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Agree over the comment re onliners but disagree on Brexit – Has been a shortage of property coming onto the market for close to 2 years now.
The truth is its too expensive to move. Prices have shot through the roof with wages almost static.
If you are in a 3 bed terrace you will not be moving to a 3 bed semi as its circa 100k extra on the mortgage.
Still lots of FTB’s, still a fair few couples in flats looking to move but there is a shortage (and has been for sometime) of standard 3 bed family properties – Anything above that is out the reach for most “normal” buyers.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
Please, please.please can our overlords please tell the public that estate agency done properly in the UK is amongst the best value in the world in the average market.
Indeed, PB listings on average cost them around £2,700 per listing in 2015/2016 accounting. Far more for a lesser No sale.No Charge full service agent in this average market?
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register
“fierce competition from online rivals such as Purplebricks, eMoov and Tepilo.”
It’s always called fierce competition but in reality there is no market share effect to support this point of view.
I know one SheepMove franchisee who could not get enough market share and has stepped away from the franchise. PB in our area of 250,000 inhabitants have 3 men on the ground and a pitiful market share. Tepilo currentlyhave 8 in the whole city and eMoov 3.
You must be logged in to like or dislike this comments.
Click to login
Don't have an account? Click here to register