With somewhere in the region of 1.2 million property sales transactions being completed each year, and 16,500 estate agents actively vying to manage those transactions, it doesn’t require a maths genius to conclude that there simply aren’t enough properties being sold to allow all agents to remain viable.
The fact, therefore, that we regularly read of another agent – whether they’re operating online, as a hybrid or on the high street - entering administration or being at threat of doing so, should come as no surprise.
This is a simple case of basic arithmetic where things no longer add up.
So, where does that leave the market as it looks to the future?
It would be easy to blame Brexit, but that would be misplaced. No, this is simply symptomatic of the cyclical nature of the housing market, where boom is followed by bust.
The length of each of these periods and the overall duration of the cycle, of course, varies. Now though, potentially for the first time that I remember, we may need to consider that this is the ‘new normal’; that transactions are lower and that there simply isn’t the need for the same number of agents as there once was.
Does this mean though that we sit back and await our fate? That survival in this ‘new normal’ is a matter of luck or chance? No, it absolutely does not – unless you want to fail?
The impact of reduced transactions is not only an issue for those agents who miss out. Alongside a fall in sales transactions, we’re also witnessing an ever-decreasing number of landlords (thanks to government interference).
Combined, these two factors place increased pressure on the market and raise questions as to where demand will be met are raised. Where will people live and how will prices be managed so that they don’t spiral out of control?
The knock-on effect this creates reaches far wider than simply the property sector. DIY retailers, skilled tradesmen and those operating within home furnishings all feel the impact too. Of course, fewer transactions means that the government has seemingly shot itself in the foot as it receives lower stamp duty receipts.
So, what is the answer? As we teeter on an unknown political future, we need to prepare ourselves now to focus on the demands that we must place on our future leaders.
Simply, we need to call for greater levels of mixed housing choices for customers and for any future government to refrain from over-meddling in the property sector, whether that is via restrictive rental policies (Section 21 is a whole debate in itself) or prohibitive levels of stamp duty.
We need a sustainable long-term housing policy that provides flexibility and choice for our customers. Businesses can then adapt and invest with certainty. 10-year boom and bust cycles hinders everyone in the housing process.
Alongside these demands, of course, must be an acceptance of the need to adapt. If this really is the new normal and transaction levels are to remain low, then we must become agile and flexible.
Doing so successfully will, I believe, prepare the strongest players to survive and thrive as the property cycle rotates once more.
*David Westgate is group chief executive of Andrews Property Group