The pain is worsening for estate agents throughout the country, as more go out of business or cut staff.
One of the country’s highest-profile agents, Hunters, has been forced to dismiss speculation that the Yorkshire-based company is set to enter administration as "complete nonsense". However, it has admitted that 40% of staff have left, some through redundancies, and it is closing two of its twenty offices. The branches in Acomb and Haxby will shut from Friday, July 25.
Managing director Kevin Hollinrake said: “Of course, this move has been primarily prompted by the extremely difficult market conditions. Sales volumes are now predicted to be as low as 600,000 this year across England and Wales, around 45% below the levels in 1992, previously the most difficult year in living memory.
“These changes were not solely driven by the market, however. Over the last few years we have seen enormous changes take place in how houses are bought and sold. The numbers of people who walk into our offices have dropped by over 75%. More and more, people are contacting us by phone or email and are searching for property using the internet.”
He added: “In our book, business is not just business - these changes will involve some job losses which will affect people’s lives. Our thoughts are with those people and we will endeavour to keep them within the Hunters family wherever possible.”
The company has not abandoned its plans for the expansion however. This week, the company opened a new sales and lettings office in Driffield and a Sheffield office will open in August. Hunters also say that its new ‘work from home’ franchise is also proving popular – Hunters now have four agents in operation following the latest signing, Tim Dalby, who will cover his home patch in Weybridge, Surrey.
The company this week also launched our new Lettings ‘Lite’ proposition where franchisees and personal agents can let properties without the need for an accounts or maintenance function, which will be provided by Hunters’ head office in York.
Hollinrake added. “We are very fortunate not to be totally reliant on the sales of properties to produce income. Our lettings division is the envy of many of our competitors and continues to thrive in York, Leeds and Manchester with a collective 1,000 properties under management helping to produce consistent revenue and healthy profits.”
Hunters, founded in 1992, has made the most of the boom years, enjoying considerable prestige. It has been listed for three years running in the Sunday Times 100 Best Small Places to Work and has picked up many awards.
The agents, members of Home Sale Network, had announced ambitious plans to expand to 1,000 branches throughout the UK. The company had launched into franchising to help power its growth and had also planned to float on the stockmarket.
Hollinrake said that he could not see when the deterioriation in the market would halt: “It will be next spring at the earliest before conditions bottom out,” he said, “and if it doesn’t happen next spring, it will be the spring after. However, the conditions surrounding the current housing market crisis are very specific in that it is all about money supply and the cost of borrowing. If these problems were addressed, then there is no reason why the market should not recover.”
However, Hollinrake said that the current market and the growth of the internet would change the face of the property industry forever.
He forecast: “There will be fewer and fewer agents needing a physical presence on the high street. That said, in some ways I don’t think agents are local enough. I foresee more agents working in the field, based from home or perhaps attached to a local hub. I also cannot see newspaper property supplements surviving: we have not had a response from them for some time. When we withdraw advertising, we do not get any complaints whatever from our clients.”
Meanwhile, more estate agency closures have been reported, with agents unable to ride out what they see as a longer-term storm.
Chris Wood, president elect of the National Association of Estate Agents, said a cull in of 6,000 jobs was under way: “I think many of the jobs have already gone or are in the process of going. It’s something that has happened or is happening, and hopefully we are now over the worst.
“However, the picture is very patchy. In some areas, there are agents still taking on staff, and of course lettings is generally thriving.
“However, those who thought they could get into the market and make a quick buck have had a rude awakening.”
And it isn’t only estate agents feeling the pain. North east legal firm Dickinson Dees is consulting over plans to make around 70 of its 165 staff redundant. Its re-mortgage, Home Information Pack and conveyancing teams are likely to be worst hit.
By Rosalind Renshaw
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