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One of Britain's largest estate agents has fallen victim to the slowdown in the housing market, prompting fears for thousands of jobs around the country. Shares trading was suspended in Humberts, which has 80 branches from Central London to Hampshire, amid doubts about its viability.
The group's demise would be the first high-profile estate agency casualty of the housing market squeeze.
Other companies, including Connells, the second-largest chain, have started to raise their fees in an effort to keep afloat as they struggle with an average 40 per cent decline in the volume of business since the new year.
Since the credit crunch, the number of mortgage advisers has fallen from about 30,000 to 26,000, according to the Association of Mortgage Intermediaries. It predicts a further fall of as much as 10 per cent across the industry as small brokers close down.John Charcol, one of the largest independent firms of mortgage brokers, is expected to announce redundancies in two weeks' time, after a review.
Humberts is understood to be considering a range of options to save its core business, from branch closures to putting divisions into administration and a sale of individual offices to local managers or rival operators.
Full-time staff numbers have already been cut from more than 700 at the start of January to fewer than 600 today.
John McLean, the chairman who was brought in at the start of the year to turn the business around, told The Times: “It is a very challenging market and you have to work far harder to sell. We are pushing up commissions but it is still far too low.”
Peter Rollings, managing director of Marsh & Parsons, the London estate agency, gave warning that up to a third of the estimated 12,000 to 14,000 estate agents nationally could lose their jobs over the coming year.
“It is painful out there and will remain so far certainly for a year. The loss of a third on the back of four years of ridiculous growth would bring it back to normality. It would end the oversupply of hopeless estate agents who in the boom pretended they could sell houses simply by sticking a board outside a home. Now the real estate agents are worth something.”
Marsh & Parsons has lost about 10 per cent of its staff over the past year. The firm has kept its standard commissions in London at 2.5 per cent for a sale, but Mr Rollings said: “Out of London I see rates rising from 1.5 per cent to 1.6 per cent but it should be 2 per cent - you can't make money below that.”
Jonathan Sedger, of Spicer McColl in Ipswich, said that prices on completed deals had already fallen by as much as 15 per cent this year, while deal volumes were down more than 40 per cent in recent weeks. “I think everywhere will suffer - even the hotspots. Nobody knows how far it will go.”
Connells, the 490-chain estate agency, has lifted its fees from an average of 1.6 per cent at the start of the year to 1.8 per cent today, its chief executive, David Livesey, told The Times. He said that at the end of the year the group would “end up with a slightly lower head count through not replacing staff”. Connells has about 4,000 staff but its business, like Marsh & Parsons, has a lettings agency that is still in good health.
Jonathan Cornell, director of Hamptons International Mortgages, the broker, said: “Transactions have fallen by approximately 40 per cent and we are losing business to lenders' direct channels. We are also having to turn away some borrowers for whom remortgaging is pointless. Our lives are very hard at the moment.”
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Don't beleive all what is said. I was made redundant from Connells in July.
Anon, Anon, Anon
The big agencies serve only to funnel buyers into financial services. Connells is owned by the Skipton group, I think?? Your Move, Reeds Rains, 'Countrywide', Haart & Halifax make money from mortgages, legals & insurance. A real independent agent will give you the Managing Director's mobile number!
Joe Catcheside, Exeter,
For all those who don't or hate estate agents: Don't forget that industries emerge only when there is a need or a gap in the market. If no one needed estate agents, there would be no estate agent within the last 20 years. Estate Agents were there because there was a demand for them.
Jon, Wembley, UK
Anyone wishing an Estate Agent ''hardship and no work'' should be ashamed! With children to support and bills to pay no-one deserves a job loss. Bob from Ramsgate I trust you know every Estate Agent in person you are wishing the worst on! If you dont you should not condem people you dont know!
Richard Pickford, Stockport, Cheshire
The sooner all these bloodsuckers are forced to actually work for a living instead of milking the public the better. Why do we have estate agents anyway? Scotland seems to manage quite well without them!
Bob, Ramsgate, U.K.
It is more important now, more than ever, to use an estate agent. These 0% websites will probably sell your property, but at a lot less than the average good estate agent. Sure you save £10,000 on fees, but if you are losing £20,000 on your price then you are down £10,000!
Ben Wilson, Northwood, England
Like every industry Estate Agency has its share of rogues, but most are just like everyone else trying to support a family in these difficult times with the added pressure that they could lose their job. House prices are often pushed up by the greedy vendor and not always by the agent.
Caroline Pierce, Oxford, UK
Estate Agents are one of a handful of businesses that give an early warning signal regarding the countries economy.
Currently the banks are holding the country to ransom devaluing most peoples main asset and their own security!. Combine this with oil prices and you have a perfect storm.
G Williams, Bristol, UK
The Estate agents are a big contributer to the boom & bust mess we find ourselves in every 10 - 15 years. Their profits are linked to house prices so they push them up. I worry about the thousands of bricklayers, groundworkers, joiners, electricans etc who are now out of work, not the Estate Agents.
Steve Townsend, Birmingham, UK
It never ceases to amaze me how many people are still so negative (if not down right abusive) towards people who OFFER a service. I cannot recall seeing a law anywhere that tells people it is compulsory to use an estate agents service? Spain still charges 10%. No, I am NOT an estate agent!
Rob Clark, Reading, UK
Ultimately market forces will prevail and the strongest agents will survive. However I have been using a site called PROPERTYHAT.com which is AMAZING. It does everything an agent does but it is TOTALLY FREE to use. You can BUY and SELL. It is the market leader in my opinion.
Allan Willis, High Wycombe, England
How sadly predictable is the string of messages gloating about this news.
Estate agents are just businesses - there are good ones and bad ones, like any other high street business.
But they all employ ordinary people who will lose their livelihoods and these people deserve some sympathy.
Michael, Blackburn,
Had the so called "Professionals" conducted themselves professionally then they would not be in the position that they are in.
They could try working for a living; I have no sympathy for them at all.
mossy, jersey,
Take a look in the mirror. Agents only reflect their clients GREED !!!
James, Sidford, UK
Humberts lost £17 million? You would have to go on 3 day seminar to be that incompetent.
Tough - time for may to join the real world
terry, L'Absie, France
How perverse to raise your charges in times of a declining market and when the market (of agencies) is in oversupply.
Soon the interweb will take the rest down too.
Booooo hooooooo.
Tom Taylor-Duxbury, Ludlow, UK
You don't hear them moaning when house prices are going up! I fail to see how they could be in so much difficulty when house prices are so much higher than they were a few years ago, even if there is a slow down, they are still making more now than they were 10 years ago.
Paul D, Southampton,
You reap what you sow . Thankfully .
Benzo, Nr Chelmsford,
They were quite happy to rake in the money when property prices were increasing faster than inflation.
S2art, Cambridge,
During the last property slump the internet was still in its infancy, hence estate agents survived. However a great many may go under this time as there are websites where houses can be advertised for a nominal sum, obviating the need to pay an estate agent for the privilege of being on rightmove.
Paul, Coventry,
My heart bleeds for them
George, Richmond,
Can't really say I'm gutted . . . I managed to cut out these leeches when I sold my maisonette in W10 directly to the buyer at the tail-end of last year.
The more professional ones can be worth their weight in gold but most of them are winging it and I'm glad to say I helped stick it to 'em . . .
Ray, London,
Recently thought of selling our house, was told to barter with the agents as they were desperate they were quite uncompetitive but found a website www.estateagencyfeesdirect.com where I think the estate agents have to compete for selling your home ended up saving a possible £800 but still yet to sell!!
Gavin, Coulsdon,
I want everyone to put their hands together and kneel in silent prayer for all of the estate agents out there.
Alison Clooney, Leeds,
What delightful news. We can only hope that Foxtons is next. House buying will be more honest and we will once again be safe to walk the streets without fear of being killed by a Foxton loony agent in the company Mini.
Laura Roberts, London, UK