Written by: Keith Tully
Published: 7th January 2020
As many as 10 estate agents per week entered insolvency last year as operators in the sector struggled to maintain their cashflows and cover their costs.
The relevant figures are based on analysis of official data by the property management firm Apropos by DJ Alexander, which has raised concerns about the prospects for traditional high street estate agent businesses.
The company’s managing director David Alexander has said that the decline of high street activity more generally in towns and cities across the UK is having an impact on estate agents and hindering their ability to attract new customers.
“The problems faced by the high street are impacting on all businesses regardless of sector,” he said.
Recent years have seen high street retailers throughout the country seeing their profit margins squeezed and their costs rising, with the net result being that more and more of these businesses are becoming insolvent.
Estate agents are also finding themselves needing to adjust to a world in which so much more of their interactions with customers and potential customers happen online rather than in person.
Mr Alexander from Apropos by DJ Alexander has said that for contemporary estate agents the challenge is to “remain relevant in a market that is shifting relentlessly online”.
Figures produced towards the end of 2019 suggest that, if trends for the first nine months continued, there would be close to 500 estate agents entered into insolvency in England, Wales and Scotland over the course of the full year.
For England and Wales, the numbers for the first nine months of last year represent the highest insolvency rates seen in the estate agency sector since 2014.
Long leases, high rents and declines in footfall are all cited as being key reasons why so many estate agents are finding themselves unable to stay afloat in the current climate.
Changes in attitudes are also believed to be playing a part in contributing to declines in estate agent revenues.
“Customers under 40 run their lives through their phones, tablets and computers,” Mr Alexander says. “This group would never consider going into an estate agents’ office for information and they are the future, so the market must shift to cater for this group.”