Nearly a fifth of the UK’s estate agents face a real risk of going bust, according to a report published by accountancy firm Moore Stephens.
Research suggests that a total of 19 per cent of the country’s estate agents – some 4,928 out of 25,560 in total – are showing early signs of financial insolvency.
Moore Stephens’ report suggests that the success of property websites such as Rightmove or Zoopla are rendering estate agents and increasingly unimportant part of the home-buying process. In the age of apps and websites, those looking to buy property can begin the process without visiting high street chain or seeing an agent.
Other new players in the market, such as online agents Purplebricks or HouseSimple, are pressuring more traditional agents by shaving off fees for customers.
Mike Finch, restructuring and insolvency partner at Moore Stephens, says that traditional high street agents are finding their profit margins “being squeezed from both sides” by large chains and cut-price online competitors.
He added: “Many areas across the UK are oversaturated with estate agents, and competition is becoming too much for some smaller businesses.”
The Moore Stephens research comes at a time when property sales in the UK have remained well below levels seen before the 2007-2008 financial crisis.
The Royal Institution of Chartered Surveyors estimated in June that the number of properties being put on the market had fallen for the fourth consecutive month.
The Moore Stephens report also suggests that more homeowners are planning to build an extension instead of buying a new property. New planning applications rose to 29,654 in the year up to March 2017, up from 29,041 in the same period last year.