A third of British estate agents could be forced to close

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by Kay Murchie

As the number of house sales plummet, around 30% of British estate agents could be closing their doors for good.

The closures are a direct consequence of the credit squeeze, which experts predict will result in approximately 45,000 repossessions, 20,000 job losses in the City and an increase in mortgage repayments for millions of homeowners.

The prediction comes from Movewithus, the largest network of independent estate agencies, who estimates that around 4,000 of the country’s 12,000 property businesses will close by the end of the year.

Robin King of Movewithus said the current climate meant fewer people wanted to buy property, with first-time buyers and families being squeezed out of the market altogether.

Estate agent closures would be massive after sales within the network dropped by between 30 and 50%, added Mr King.

People may not like estate agents but if they are doing well, everyone else is too. If no one is buying and selling, it is an indication that no one is making any money, he said.

Some estate agents have already started making job cuts and have closed some of their poorer performing offices, concluded Mr King.

In February, Your Move, the country’s third-largest estate agency, announced it was closing 10 of its franchised branches while estate agency, Humberts, recently announced annual losses of £17 million.

It has also been established that dozens of staff have quit jobs at Foxtons, one of London’s most profitable estate agents. In February, over 60 staff left the company after poor sales figures.

In addition, it was rumoured that Hamptons International applied to its bankers for an emergency £5 million of funding due to plunging sales, however, Hamptons has denied this.

Hamptons was bought by real estate company Emaar Properties for £82 million in August 2006. It said that Emaar would continue to provide the financial funding and professional resource to extend Hamptons’ global reach and insisted that it was in a strong position to do so.

Land Registry figures show that in December 2007, only 8,444 houses were sold compared with 14,502 in December 2006.