The director of one of the UK’s largest estate agency networks has predicted that 4,000 estate agents will close within a year because of market pressures.
Robin King, director of Movewithus, says inexperienced and badly structured agencies will go first.
He adds that most agencies will experience losses as a result of the credit crunch.
He says: “One of the most important things agencies must prepare for are market downturns such as the one we’re experiencing.”
King bases his prediction on the network’s data, which shows that sales through Movewithus fell by between 30% and 50% in Q1 2008 compared with the same period last year.
King adds: “Many of the significant estate agency chains are cutting costs and they will see small losses as signs of success in the existing market.”
But Peter Bolton King, chief executive of the National Association of Estate Agents, says: “I think King needs to look at his numbers again. “Even in the dark days of the early 1990s when economic factors were much worse, we saw nothing like a third of estate agencies closing.”
But he adds: “As the market slows and estate agencies have to work harder for their money, it’s likely we will see a number of the more inexperienced ones showing signs of strain.”
Peter Brodnicki, chief executive of Mortgage Advice Bureau, says: “If the market carries on like this cuts will be needed. This adjustment needs to happen and it’s likely to lead to consolidation, weaker branches being closed and a leaner but stronger market.”