Housing slowdown means 15,000 estate agency job losses

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by Kay Murchie

According to a report by the Centre for Economics and Business Research (CEBR), the credit crunch will cost 15,000 estate agents their jobs this year.

Furthermore, the organisation claims that the business services sector as a whole will suffer over the short-term with up to 40,000 jobs lost. Solicitors, accountants, architects and marketing professionals will also be affected by the slowing housing market.

For the first time since 2001, the industry is set to decline, and CEBR predicts total employment in the real estate sector will fall from 292,000 to 277,000.

Nationwide building society’s latest monthly survey revealed that UK house prices fell 2.5% in May - the largest monthly fall for 17 years.

It was the seventh consecutive monthly fall, making it the longest consecutive period of decline since 1992. Prices are now 4.4% lower compared with this time last year which equates to a fall of £8,000, this has taken the average UK house price down to £173,583.

The Royal Institution of Chartered Surveyors (RICS) predicts that house prices will fall by 5% by the end of the 2008. However, many economists believe the drop could be as much as 30%.

Jorg Radeke, one of the authors of the CEBR report, said although it is unlikely to be the victims of the credit crunch that will garner the most sympathy, estate agents and others involved in managing real estate are likely to find the next year especially tough and there will be extensive job cuts.

The only silver lining for this part of the business services sector is that ‘what comes down must go up’ and as real estate is among the first to face the economic downturn it will also be among the first to benefit from a future economic upturn, added Mr Radeke.

Commenting on the CEBR report, Chris Brown, president of the National Association of Estate Agents, said I have no doubt people in the estate agent profession will lose their jobs but that is an enormous figure.

There will be casualties, but I think some of them will be people associated with the profession, concluded Mr Brown.