Traditional estate agencies could be in for a stormy autumn and face being the next casualty of the high street shake-out according to accountancy giant KPMG.
Blair Nimmo, KPMG’s head of restructuring, says: “High street estate agents are presently facing an unprecedented set of challenges. The rise of online-only agencies have combined with falling house prices, a slowdown in sale activity and a raft of legislative changes, all of which have generated headwinds for your average high street agent.”
He adds: “I would therefore not be surprised to see operators across this sector struggle over the second half of the year and beyond.”
KPMG almost inevitably cites Foxtons (battling the poor London market) and Countrywide (“in full-blown crisis” according to the accountancy firm) as examples of how the traditional agency model is under pressure.
By contrast, KPMG cites Purplebricks, Emoov and Tepilo as just some of the online operators eating into the market share of bricks and mortar firms.
It says the high street has been “pummelled” in recent months with high profile retail administrations and store closures - House of Fraser, Maplin and Toys R Us have all gone bust, while New Look, Carpetright and Mothercare have all shut stores. The casual dining sector has also suffered extensive closures.
“Whilst a number of chains have survived through the implementation of successful Company Voluntary Agreements or via pre-pack administrations, inevitably there have been site closures and job losses across many parts of the country” according to KPMG.
Although the number of companies in England and Wales entering into administration during the second quarter of 2018 fell to 302 from the 347 recorded in the previous quarter, year-on-year the number was significantly higher.