In the last year the number of UK estate agencies entering insolvency leaped a massive 57%, a new report has claimed.
Between June 2012 and June 2013, 77 estate agents went under, compared with just 49 in the previous 12 months.
The data comes from accountancy firm Wilkins Kennedy, who suggested that the prolonged property slump is to blame, despite the recent upturn.
While the UK property market struggles, it appears London continues to prosper. Anthony Cork, a partner at Wilkins Kennedy said: “London has always been a more resilient market for estate agents, due to the higher property prices, constant demand and healthier lettings markets.”
Although competition is always higher in the capital, transactions are constantly being made, which isn’t the case in most other parts of the country.
Property sales dropped by 60% between their peak in December 2006 and their lowest point in December 2008. Since then they have hardly changed.
According to Wilkins Kennedy, the sales drought means many estate agents who depend on commissions simply can’t function.
Other factors the accountancy firm blames include the rise of online markets led by sites such as Rightmove and Zoopla, and competition from so-called ‘quick-sale companies’, who slash the offer price to help sellers in financial distress.
These quick-sale companies target sellers who are most desperate to part with their properties. This can distort people’s idea of what the going rate or property is, which can have a domino effect and disrupt the local property market.
These companies have been criticised by the Office for Fair Trading for misleading customers and dropping prices excessively to secure a sale.
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