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Estate agents are entering a ‘rocky period,’ an accountancy firm has warned, as research shows insolvencies in the sector are on the rise.
Analysis by tax, audit and advisory firm Mazars has found insolvencies of estate increased by 86% last year, from 126 in 2021 to 234 in 2022.
The firm said estate agency businesses have suffered from the decline in UK house sales and prices over the past six months.
Rebecca Dacre, partner at Mazars, said: “Aspiring homebuyers are looking at rising interest rates and soaring living costs and will often decide to delay their dream of home ownership for another year. Fewer prospective homeowners will inevitably mean a rocky period for estate agents.”
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The battle for market share has always been fought hard. This year, as transaction volumes continue to decline (actual BoE Jan mortgage approvals were a shockingly low 29,500 when not 'seasonally adjusted') intelligent agents will be fighting the battle for share of transactions, not stock. Which means walking away from unrealistic sellers and letting them list with poor quality, overvaluing agents, who will be making things even harder for themselves.
As an estate agent I agree with Charlie. Even though the market is normalising back to pre covid times the volumes have declined in the last 4 months and it's taking time for potentials buyers and sellers to adjust.
I am seeing that the majority of buyers in the market are more serious and looking for the right house to come to market.
I am not a quick fix estate agent, I work on the basis that I offer a higher end to end service and although that isn't what everyone is looking for, in this current market it is what they need.
Many will still be looking for the lower value online agencies which are not offering the value of service needed in this current market and sellers won't be fooled by this for too long.
Especially when their homes are sticking on the sales front. Now is the time for quality agents who price wisely and offer an education based platform for their clients along with professional negotiation skills.
This is a difficult industry at the best of times, but now more than ever, it will be important for professional agents to stop competing with rogue agents by winning listings with inflated valuations and as the turnover of property slows down further, it may well be time to look at overheards and establish what can be addressed in good time.
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