New analysis from an insolvency firm which monitors levels of financial distress across the UK economy has claimed that 2,893 estate agents were experiencing financial distress at the start of this year
New analysis from an insolvency firm which monitors levels of financial distress across the UK economy has claimed that 2,893 estate agents were experiencing financial distress at the start of this year, up 13% from 12 months ago. One-third of these are forecast as unlikely to be trading in three years’ time.
These businesses all have at least one ‘red flag’ against their name, which Begbies Traynor said was a warning sign “that indicates around 33% are unlikely to still be trading in three years’ time”.
Estate agents in London have seen the most marked increase in distress over the period, the firm said, with 980 firms in financial distress, up 19% on the year.
Julie Palmer, a partner at Begbies Traynor, said: “From April’s shake-up of Stamp Duty and the recent clampdown on letting agent fees revealed in the Autumn Statement, to the phasing out of buy-to-let tax relief from April 2017, the sector can’t seem to catch a break.
“Despite continued house price resilience, estate agents, especially those in London, have had a particularly challenging time, impacted by low transactional volumes, weak buyer and seller confidence, as well as fierce competition from online rivals such as Purplebricks, eMoov and Tepilo.”
The business has sharply accelerated its forecasts of the number of agents being in financial distress, from a quarter to a third, in the space of just one month.
In December, Begbies Traynor data suggested that 25% of estate agents across the UK had financial problems – an 11% rise on a year ago. However, it said then that the worst could be over.