Tonight:
4°c
Property gloom forces Mayfair agent to sell up after 17 years
Mira Bar-Hillel, Evening Standard27 Aug 2008
A Mayfair-based estate agent is to stop selling homes after 17 years in business.
The collapse of the housing market has forced Jonathan Vandermolen, founder of Blenheim Bishop, to make 10 staff redundant and put his offices on the market.
Mr Vandermolen said: "I couldn't make it work. Income from new homes was 75 per cent down on the previous year and my view of that market is not good long-term."
The closure of Blenheim Bishop's sales side - the firm will continue letting properties - comes as estate agents face the worst market conditions in years.
Household names like Kinleigh, Folkard and Hayward are shutting formerly busy London offices.
Private equity group BC Partners, which paid £390million for Foxtons in May 2007, has been forced to call in banking advisers NM Rothschild to tackle its "debt mountain". Branch closures have not been ruled out.
Savills will announce its figures tomorrow and they are expected to make grim reading. The estate agency has already reduced its advertising budget and made redundancies among its 4,000 London employees.
Two years ago, while the market was booming, Mr Vandermolen sold Blenheim Bishop to Humberts, another long-established firm of estate agents. At the time the business was valued at £2.3 million.
Humberts, however, hit financial problems and Mr Vandermolen bought back his part of the business for a peppercorn £1.
Despite the collapse of the sales side of his business, Mr Vandermolen said the company's five-strong lettings management division was "firing on all cylinders".
The firm's main office in South Audley Street is on the market - although Mr Vandermolen hopes to remain in some of the space.
He told Estates Gazette: "Most agents operate on the basis of a 25 to 30 per cent profit margin. If trade is 50 per cent down and 50 per cent of your costs are for premises, staff and advertising, then it becomes difficult.
"If we have a couple of years of this, perhaps 50 per cent of all estate agents will go out of business."
The news comes as website Primelocation revealed that house prices in London's top areas fell by a further three per cent in July.
Primelocation chief executive Mark Milner suggested it could be the start of a sustained decline.
"The continuing stand-off between buyers and sellers is leading to stock remaining on the market and levels are 48 per cent higher than last July," he said.
Reader views (1)
Yes, doom and gloom in the housing market and what does our unelected prime minister and his equally gormless chancellor do? Dither over suspending or abolishing stamp duty - thereby completely wiping out any early prospect for market recovery.
- Mikko Takala, Drumnadrochit, Scotland, 28/08/2008 10:03
Report abuse
