Estate Agents Feel the Pain
May, 07, 2008
When it comes to trust, the public generally puts estate agents in the bracket shared by politicians, journalists and possibly even pirates. But is it time to feel just a little bit sympathetic?
Falling house prices and the mortgage deal meltdown has resulted in Estate Agencies closing branches at a rate of 150 a week. There have been around 4,000 job losses since the beginning of the year and Movewithus, the country’s biggest network of independent estate agencies, is predicting the closure of a third of the remaining 12,000 firms by the end of the year.
Anecdotally, over the past six years I have seen four new Estate Agents open on the small high street where I live on the fringes of Southwest London: one closed in February and the stock in the others looks fairly static.
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It’s not surprising that branches are closing at such a rate - the National Association of Estate Agents says that their members are selling half as many properties now as they did only a year ago. On average, agents sold an average of seven properties in March, compared with fourteen in March 2007.
May is traditionally one of the busiest times for house-hunters, but another sign of gloom, is that the number of buyers walking into Estate Agents over the bank holiday weekend was down 30% year on year. People are, quite understandably, sitting this one out, sellers reluctant to sell and buyers witing to see how low the property value pit will go.
Although many regard estate agents in low regard, and perhaps feel they’ve profited enough from the years of boom, they probably haven’t profited any more than home owners who’ve seen their equity soar and the lenders who’ve raked it in during the property hey day. That’s right – why blame agents for ‘greed’ when the whole property boom was built on over-confidence by every player in the game? I certainly feel sorry for the lovely Estate Agent I once dealt with (Phil, from Lawson Rutter, from memory), and yes I did say lovely! Disclaimer time: No, I’m not married to an estate agent and no, I’m not related to one…
So what can be done to reverse the trend? It seems all interested parties, from the Council of Mortgage Lenders, the National Association of Estate Agents and the Royal Institute of Chartered surveyors are urging the banks and building societies to increase mortgage lending before the situation gets even worse. The property experts say there are people who want to move but without a mortgage deal they simply can’t and hence business is stagnant.
The Bank of England has even suggested that the long-term effects of the credit crisis have been overstated – are the emergency measures taken by lenders too much, too late? If so, this won’t help the market recover anytime soon.
SaveBorrowSpend Philippa Adam
