The number of estate agents entering insolvency was 77 in the 12 months to June, a report says.
The figure is up from 49 for the comparable period a year earlier.
The report, from accountants Wilkins Kennedy, says the prolonged slump in transaction numbers is to blame.
However, only a small handful of agents went bust in the London area.
Anthony Cork, partner at Wilkins Kennedy, said: “London has always been a more resilient market for estate agents, due to the higher property prices, constant demand and healthier lettings markets.
“Although competition for business is fierce, transactions are constantly being made, which isn’t the picture elsewhere in the country.”
The report also cites the rise of portals Rightmove and Zoopla, and competition from quick sale companies, as factors which have not helped estate agents.
Cork said: “The new breed of quick sale companies targets those sellers who are most desperate to sell.
“As well as snatching instructions from estate agents, they may also be disrupting local property markets as buyers get a distorted idea of what the going rate of property is.”
He said smaller agents were most at risk of going bust, finding it hard to compete with “the more financially robust and well-established larger chains”.
Comments
I wonder how many of them went bust, cleared debts and started again and no one even knew?
The number of agents starting up every year may approach 1000,and reflects frustration by employees such as no name,so there is a huge net gain.Business opportunities have grown with growth of rentals,but there are dangers involved,such as rent control being mooted!
There is a happy mix,keeping staff and clients happy.
One day the VAT man will demand 20% back,and in business,there is black and white but no grey.
I agree there are too many agents,as barrier to entry is nil,often people set up with a clients backing,which gives support,but obligations possibly to trade,and this happens in many of the cases I have known.Good luck to all who play by the rules!
I agree with Neil, I have recently opened a new estate agents within Kent, and the quality of service I am providing compared to the larger chains is untouchable. My current Vendors are realising the time and care I put into each instruction and sale that they are recommending me far and wide. The larger chains do not have the time to focus on service as they are too target driven. (and trust me I have worked for many corporates) Some agents may be going out of business due to the larger chains being more well known, and therefore preferred for an instruction. However a tip for new estate agents starting up, if you are a new company you are not eligible for VAT until you hit a certain threshold of income, therefore you can advertise all fees without VAT which will save vendors hundreds of pounds at a minimum. Bigger agents or existing agents can not do this so you have a new edge on valuations. Good luck.
Too many estate agents.
Too many franchisees....One born every minute...A fool & their money etc.
77 out of 20000+ is this really newsworthy or just an attempt to scare off new entrants to the market