More than 7,000 estate agents financially struggling
More than a quarter of estate agents are struggling financially, as pressure from online rivals grows stronger, research has showed.
The number of agents that went insolvent over the past year so far increased to 153, from 148 in the previous 12 months, according to accountancy group Moore Stephens.
Now around 7,000 estate agents have signs of financial distress, the group said.
Online firms such as Purplebricks and eMoov have upped the pressure on profit margins of more traditional high street players.
The government plans to ban letting fees is set to further squeeze estate agents, Moore Stephens said.
Declining sales volumes are also playing a part in estate agency problems.
Big beasts struggling too
It comes after Britain’s largest estate agent Countrywide last month issued another profit warning.
And earlier this year, Foxtons reported a dramatic fall in profits.
Chris Marsden, restructuring partner at Moore Stephens, said: “Insolvencies of high street estate agent are increasing as online competitors continue to chip away at their sales and undermine commission rates.
“With the ban on letting fees stated to come into force in 2019, estate agents will struggle to pass those fees onto landlords.
“Some areas in the UK are appear to have an excess capacity of estate agents, which could mean there is not enough business to spread around as property transactions stagnate.
“Estate agents with a traditional model may have to look at whether they can reduce overheads and review their service offering to effectively compete in the current market.”