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Home sales slump 'will shut down 4,000 estate agents'
Mira Bar-Hillel, Property Correspondent14 Apr 2008
A third of Britain's estate agents could be forced to close this year as the number of house sales plunge.
Predictions made by the biggest network of independent estat e agenc ies, Movewithus, estimates that around 4,000 of the country's 12,000 property businesses will shut by December.
The move will be direct result of the credit crunch, which experts predict will cause an estimated 45,000 repossessions, 20,000 job losses in the City of London and a rise in mortgage repayments for around three million households.
Robin King, director of Movewithus, said the current climate meant fewer people wanted to buy property, with firsttime buyers and families being squeezed out of the market altogether.
He added that estate agent closures would be "massive", after sales within his network dropped by between 30 and 50 per cent.
"People may not like estate agents but if they are doing well, everyone else is too. If no one is buying and selling, it is a sign that no one is making any money," he said.
Some estate agents have already started making redundancies and have closed some of their poorer performing offices.
New figures have revealed that dozens of staff have quit jobs at Foxtons, one of London's most lucrative property shops.
At least 63 staff left the company in February alone following poor sales figures. Just 8,444 houses were sold in December compared with 14,502 the year before, according to Land Registry figures. The drop means that estate agents who have grown accustomed to easy sales in the city are being forced to work harder for each deal or leave.
Foxtons - which employs 1,200 staff in 23 branches across the South-East - is not the only company to feel the pinch.
Hamptons International has been forced to play down recent rumours that it had applied to its bankers for an emergency £5million of funding due to plummeting sales.
The agency, which was bought by real estate company Emaar Properties for £82million in August 2006, said that Emaar would "continue to provide the financial funding and professional resource to extend Hamptons' global reach" and insisted that it was in a "strong position" to do so.
Reader views (14)
I am very surprised at the comments everyone but a few are making! Estate Agents take time and care to research property values prior to valuing the clients home. It's the demand that dictates the value of homes not the estate agents. Now the market has slowed, good Estate Agents will come into their own. Lets not forget that if your selling and you get less for your property this year, you will ultimately buy at a cheaper price too. However, all this doom and gloom and excessive media coverage has made first time buyers running scared. At the moment there are a lot of vendors willing to take up to 10 % off the price of their homes to secure a buyer, as they know they will receive a similar reduction on their purchase. All that is needed is common sense or we will inevitably talk ourselves into a recession. "Your home is only worth as much as someone is willing to pay for it"
- Dan., Maidstone., 02/05/2008 12:06
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Part of the problem!
- Danny Powell, London UK, 15/04/2008 02:17
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Something about living by the sword comes to mind...
- Ralph, London [currently in Taiwan], 15/04/2008 01:01
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Hey, steady on there Ali Moustafa.
Erm, no one is being punished by the hand of god unless of course there is a chapter in your bible that says “thou shalt not speculate”!
I find your comment rather disturbing. There is enough religious rubbish in this country without the likes of you wanting to link it with the impending house price crash.
Rather, “brainwashed speculators will now reap what they sewed. This is down to common greed”. Lets not bring your god into this eh?
There’s a good chap.
- Disturbed, Bradford, 15/04/2008 00:47
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I have a friend in Foxtons.
From what I hear about them, morale is at rock bottom. When so much of your pay packet is based on commission, you've got little option but to move on.
Hope he sees the light.
- Jimbo, London, 15/04/2008 00:31
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They have been ramping prices up over their value for years. I won't shed a tear.
- Gavin, London, 14/04/2008 23:48
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7 fat years followed by 7 lean years it goes in seasons and cycles not sure of the stat's but most estate agents have a young age profile who have no knowledge of lean years and cycles. I have chuckled in the past when I refused to be drawn into over priced housing stock with comments about housing is only going one way. Trouble is the next generation will also get burned.
- Chris Wilson, London, England, 14/04/2008 22:54
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Good close the estate agency offices, sell online and re-invest into high streets opening fishmongers and other traditional shops.
- Chris, Bournemouth,uk, 14/04/2008 22:40
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At last, soon, I'll be able to buy a pint of milk and a newspaper in my local shop, once Poxtons moves out, at last!
- Priddy, United Kingdom, 14/04/2008 22:18
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Poxtons have brought this on themselves with their ever-more-fanciful valuations to get new properties on their books, and their contempt for any buyer who questioned their judgement. I have zero sympathy for these companies and I'm sure I'm not alone.
They thrived pumping up the bubble, it's fitting they should be the first to suffer as it pops (sadly those conned into buying at or near the top of the market will also suffer the consequences of estate agent greed).
- Tom, Somerset/Tooting, 14/04/2008 22:05
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Good riddance, estate agents are lower than a snakes belly, any reasonable honest person would find a better way to earn a living
- Paul Rowe, Port Elizabeth,South Africa, 14/04/2008 21:45
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Think the above comment is a little narrow-minded to say the least.
I am an ex estate agent. It takes skill to deal with small minded individuals when all we are trying to do is sell peoples houses. People instruct an agent to sell a home, and buyers buy them. It is not rocket science but does take skill to deal with people. People seem to forget that it is not Estate agents who have pushed house prices, but everyday public who are willing to pay a price. As an agent, we value using comparable evidence to back up a valuation that we recommend but ultimately it is a vendor, people like the person above, who decide a price. And if we sell a property then we get paid. I have struggled to understand the negativity that estate agents receive. I know that I have always looked after my vendors, and my buyers and done a great job with them and consequently sold hundreds of houses in my six years doing this job. Its people like the one above who would be the first to complain to their agent that they are not getting vieiwings when they are propbably the ones who wouldn't take an agents advice.
Expand your mind and try to think outside the box. Stop listening to the "1980's" image of estate agents. Make your own mind up!
- Jon, Peterborough, 14/04/2008 16:26
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I'm rather surprised that there are that many estate agents in the country in the first place. It sounds like there are more estate agents than Indian restaurants.
I know which I would prefer!
- Roger, Guildford, 14/04/2008 15:07
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Good riddance! they will not be missed. It takes no skills to be an estate agent, incompetent vultures, preying on brainwashed speculators shall now feel the punishing hand of God.
- Ali Moustafa, Bradford, 14/04/2008 12:33
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