A fifth of estate agents at risk of collapse

Blog Insolvency

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One in five of the nation’s estate agents are teetering on the brink of insolvency, amid increased competition from websites.

A report out this week revealed that 19 per cent of businesses (equivalent to almost 5,000 of the 25,560 operating in the UK) have reported a squeeze on their finances.

Part of the problem is that that traditional High Street firms are facing a growing battle against online platforms, which allow house hunters to view houses and flats on their own.

The advent of property websites comes at a time of unprecedented difficulties for many estate agents.

Official figures show that the number of property deals is yet to return to the level recorded prior to the financial crash of 2007/2008.

The fall in transactions has been attributed to ongoing unease about national and global events and the fact that an increasing number of homeowners – who may once have looked to upsize – are choosing to extend their existing property rather than secure a move to a larger premises.

Last week, the London-centric Foxtons – one of the best-known chains in the UK – announced that its profits had plunged by 64 per cent in the first half of this year.

Chief executive Nic Budden laid the blame for the figures on “unprecedented economic and political uncertainty”.

But the situation is arguably more difficult still for smaller operators, who are competing not only against websites like Zoopla but larger rivals whose higher profile allows them to hoover up a lot of the remaining business.