Estate agent insolvencies on the rise - research

Estate agency insolvencies have increased by 11% over the past 12 months, research suggests.

Analysis by audit and accountancy firm Mazars found there have been 233 closures of estate agency businesses over the past 12 months, up from 209 over the same period.

This was attributed to falling house prices and dwindling transactions, while some office and retail tenants have been vacating property as leases come to an end and landlords have struggled to find replacement tenants.

There has been a 16% rise in real estate investment companies overall, with 738 affected.

Insolvencies among real estate landlords increased the most over the past year, rising by 35%, from 201 to 271. Insolvencies of property developers increased 4%, from 224 to 234.

Rebecca Dacre, a partner at Mazars, said: “The real estate sector has been hit particularly hard over the last three years. More and more businesses in the industry are reaching the end of the road.”

“Landlords are in a difficult position, often carrying large amounts of secured debt which leave them with little room to negotiate, especially as the property market downturn impairs the value of the property.”

“Insolvency can be inevitable and within the residential market, will sadly take more and more rental properties off the market and away from prospective tenants.”