Jump to content
House Price Crash Forum
Sign in to follow this  
Spirit

Bad News For Estate Agents

Recommended Posts

THERE is unlikely to be any recovery in the value of the estate agency market until 2008.

That is the prediction of market analysts Key Note, who reckon that a revenue decline of 9.1 per cent this year will be followed by a further decline of 10.3 per cent in 2006. Their forecast comes as a drop in transactions and profits and consequent branch closures continue to afflict wide sections of the industry.

While Countrywide, the biggest estate agency group in the country, reported profits down 90 per cent, a 30 per cent fall in transactions, staff cuts of nine per cent and 33 branches closed in the first half of this year, the 30-office Jump agency, based in Yorkshire, has gone into administration. Jump was established in 1995 and in recent years experienced rapid growth in turnover —£146 million in 2004 compared to £10 million in 2001.

According to research by industry analysts ICC Credit, two per cent of companies within the sector are in liquidation and three per cent have County Court Judgments filed against them. Matthew Debbage, head of product and marketing at ICC Credit, said: “If the rise in mortgage debt and falling house prices keep going, we might experience a significant economy slowdown, which will push up the number of companies failing in this sector.”

http://www.estateagencynews.co.uk/news/cur...news-0905b.html

Share this post


Link to post
Share on other sites

trouble is they have had ten years business in the last five years and now there is insufficient to keep them all going - victims of their own success - still they can find something useful to do now

Share this post


Link to post
Share on other sites
Guest Riser

And just when they think it couldn't get any worse in 2007 along will come the sellers packs to put te last nail in the housing market coffin B)

In the run up to the introduction of HIPS, the market could become saturated with properties

PACKS WILL CREATE AN UNREALISTIC MARKET — NAEA

A majority of National Association of Estate Agents members feel that the introduction of Home Information Packs in 2007 will create “an unrealistic housing market”.

An influx of homes is expected to flood the market in the months before the introduction of HIPs, as sellers attempt to avoid the increased cost of selling a property, claim the NAEA. 

The cost of the HIP, paid for by the homeowner, is expected to be between £600 and £1,000. It could be even more for larger-than-average properties and recent information released by the Halifax stated that the cost of owning a home rose by five per cent in 2004 largely due to council tax, maintenance costs and household insurances.

In the NAEA poll, 61 per cent of members highlighted the prospect of an unrealistic housing market, while 54 per cent felt that the loss of first day marketing rights could deter homeowners from putting their properties on the market. 

Only 24 per cent felt that the HIP would not be a deterrent and 22 per cent of respondents felt it was too early to comment.

NAEA president Chris Hall said:  “It is very difficult to imagine exactly how the market will react. In the run up to the introduction of HIPS, the market could become saturated with properties. Conversely, it could be starved for a number of weeks. Keen sellers may well be looking to avoid any extra cost by marketing their property before the Pack becomes compulsory in 2007. Meanwhile, buyers could be out in force when they realise it is ultimately the buyer who pays.

“Once the HIP has launched, the market could experience a slowdown, with decreases in the number of new properties entering the market as new sellers are deterred by the time and cost implications of organising a HIP.  The effect of this would be an unrealistic market climate.

“In these unfamiliar conditions, valuing property may become more difficult and assessing supply and demand could also be hindered.  All this could have severe consequences for the housing market in 2007.”

Share this post


Link to post
Share on other sites

and more gloom from EA news...

The first cracks are starting to appear. Estate agencies are now beginning to wobble.

Those businesses without any funding set aside for a rainy day will start to feel the pinch as the market struggles to find its feet — all of which provides the perfect opportunity for well-funded businesses to start preparing their expansion plans!

It might sound mercenary, particularly if it’s your own agency that is under threat, but with no great upturn imminent and other economic indicators looking gloomy, we have to face the reality that the estate agency market as we know it is going to change.

According to PKF Accountants and Business Advisers, the number of corporate insolvencies is up, with personal insolvencies running at record levels. Consumer debt has hit a trillion pounds, there is a total lack of confidence in the market and high street retail is a bloodbath.

Estate agents may be pinning their hopes on a modest upturn following the quarter per cent cut in interest rates, but the cooling economy will prevent a renewed boom.

So if estate agencies are going to buckle, which ones are likely to go under first? PKF’s head of corporate recovery, Philip Long, told me that smaller independents are more likely to weather the storm, but mid-size businesses will struggle the most, with turnover unable to keep up with costs.

Meanwhile, some of the larger better-funded businesses will get even bigger as they buy up the competition at bargain prices.

Having acquired many businesses in the past, including Woolwich Property Services (now haart) and part of Cornerstone (now Spicer McColl), I believe that many firms will now be setting out on the acquisition trail.

But even that can be fraught with dangers and difficulties.

There are at least two large corporates who have recently bought at top dollar — and I can’t help but think they may be beginning to regret their actions.

http://www.estateagencynews.co.uk/columnis...psmith0905.html

Share this post


Link to post
Share on other sites

Horrible to see anyone in trouble..

Their motives could be questioned over the last few years..

This last boom, before the "baby boomers" generation leaves the market.

a swansong for an industry..

An arrogant EA I know and his convertable Audi and his "This time it will never dip.." attitude may regret having financed his car..

ha..

but some have families.. they have to feed..

Actually i would like to have had a family... by now..

So..

well it couldn't happen to a nicer bunch

Share this post


Link to post
Share on other sites
trouble is they have had ten years business in the last five years and now there is insufficient to keep them all going - victims of their own success - still they can find something useful to do now

i've no objection to making hay etc. but when it starts psg it down you put the shutters up and do what u can - retailers have been having sales - so should EAs

Share this post


Link to post
Share on other sites

I presume most here are FTBs, are EAs as rude to you these days as they were a year ago ?

A couple round here must be re-examining their old lists, as some occassionally cold call.

Share this post


Link to post
Share on other sites

By the time the next wave comes around it will be a diffrent ball game.

I'm developing a house sales portal with full 3D interactive lookaround viewing and an automated virtual agent who guides you round - otherwise known as a "Local Interactive Agent Replacement".

The L.I.A.R. is really quite clever and key to the success to this venture as you click from room to room it predicts the most likely set of questions and comes up with answers that are specifically worded to tell you exactly what it thinks you want to hear regardless of the full database of actual details that sits behind the application. This was the really difficult part of the application to develop, some really sneaky coding was needed to get that bit right.

Best bit about the L.I.A.R. is that once fully deployed estimated runnings costs are about 1p per customer interaction (a little bit of electricity for the server and about 10mb of bandwith per visit).

I'm struggling with the I.F.U though (Interactive Funding Unit) I just don't seem to be able to get the figures right for these mortgage applications, no matter how hard I try.

:D

Share this post


Link to post
Share on other sites
By the time the next wave comes around it will be a diffrent ball game.

I'm developing a house sales portal with full 3D interactive lookaround viewing and an automated virtual agent who guides you round - otherwise known as a "Local Interactive Agent Replacement".

The L.I.A.R. is really quite clever and key to the success to this venture as you click from room to room it predicts the most likely set of questions and comes up with answers that are specifically worded to tell you exactly what it thinks you want to hear regardless of the full database of actual details that sits behind the application.  This was the really difficult part of the application to develop, some really sneaky coding was needed to get that bit right.

Best bit about the L.I.A.R. is that once fully deployed estimated runnings costs are about 1p per customer interaction (a little bit of electricity for the server and about 10mb of bandwith per visit).

I'm struggling with the I.F.U though (Interactive Funding Unit) I just don't seem to be able to get the figures right for these mortgage applications, no matter how hard I try.

:D

Funny

Why dont you invent a smiliar virtual Houses of Parliment incorporating similar virtual politicians. They'd cost less to employ.

Edited by trev

Share this post


Link to post
Share on other sites

For the purposes of my own amusement and in order to keep a keen eye on the market, I am registered with all the local estate agents.

Recently, they have been calling up on an almost daily basis, desperately trying to flog me their shoddy wares.

Two days ago, one particularly ghastly EA phoned trying to persuade me that, although I had clearly stated on their forms that I was looking for a three-bed semi with a garden, what I really REALLY wanted was a two-bed flat with no garden for the 'greatly reduced, summer sale offer' price of £289K (and isn't it now Autumn, BTW?).

It didn't seem to matter to this woman that I wasn't remotely interested in the property, she just kept repeating over and over like a mantra that 'you get more space for your money in a flat'. She sounded drugged; perhaps she was practising some strange form of transcendental meditation. Eventually, I gave up on the polite refusals and told her quite rudely where she could shove her flat, before hanging up.

Today, I received in the post the details for the flat. With a 'compliments' slip, for heaven's sake.

I thought it was depressingly telling that, even in a failing market, when they should be doing all they can to cagole and coerce you, they seem unable to break their old habit of shouting you down...

Share this post


Link to post
Share on other sites
trouble is they have had ten years business in the last five years and now there is insufficient to keep them all going - victims of their own success - still they can find something useful to do now

Indeed, the perils of basing your business model on never ending exponential growth. See Travis Perkins for further details.

Many recent EA's have had it easy, they've grown fast and will be unable to adapt to a different market, Jump for instance were established in 1995 so they've never had to weather a bear market.

All those poor agents will have to retrain and become brickies, they earn £90K you know, spot the flaw in this logic :)

Edited by BuyingBear

Share this post


Link to post
Share on other sites
Guest Bart of Darkness
Best bit about the L.I.A.R. is that once fully deployed estimated runnings costs are about 1p per customer interaction (a little bit of electricity for the server and about 10mb of bandwith per visit).

When will the optional "Pants on Fire" plug-in enter beta testing?

Share this post


Link to post
Share on other sites
That is the prediction of market analysts Key Note, who reckon that a revenue decline of 9.1 per cent this year will be followed by a further decline of 10.3 per cent in 2006. Their forecast comes as a drop in transactions and profits and consequent branch closures continue to afflict wide sections of the industry.

Doh, excuse me if I am stupid but doesn't this admit to a 20% fall in HPs by end of 2006? EAs revenue are directly related to HPs are they not? Or do they sell fruit and veg on the side?

If you take into account the above-mentioned branch closures, I imagine to save revenue, then you would assume the HP drop would be greater.

Share this post


Link to post
Share on other sites
Doh, excuse me if I am stupid but doesn't this admit to a 20% fall in HPs by end of 2006? EAs revenue are directly related to HPs are they not? Or do they sell fruit and veg on the side?

If you take into account the above-mentioned branch closures, I imagine to save revenue, then you would assume the HP drop would be greater.

The irony is, of course, that if EAs got their volumes back up by actively encouraging prices down they could quite easily cope with a 20% drop.

I tried explaining this to an EA recently and he thought long and hard before replying: "Yeah, but prices just won't go down that much..."

Quite happy to watch prices increase 15-20% YOY for years, though weren't you... ;)

Share this post


Link to post
Share on other sites
"Yeah, but prices just won't go down that much..."

Quite happy to watch prices increase 15-20% YOY for years, though weren't you...  ;)

And that's why I'm so unsympathetic to their plight. They had ample opportunity to get themselves prepared for this eventuality - but they were just too happy to rake in the profits without a care. :angry: :angry:

Share this post


Link to post
Share on other sites
I've emailed those links to the Times, Guardian, Sun, BBC news and Panorama so far.

God, wouldn't it be great if they actually put that stuff into their 'news' reports instead of the colour dress Kiera Knightly wore to her latest premiere, or whatever?

But then, that would mean Joe Public might actually be shaken out of their dumb-ass reverie and we wouldn't want them coughing up their weetabix, now would we?

As the magificent Bill Hicks once said: 'Go back to bed, America. Your government is in control. Here's Love Connection. Watch this and get fat and stupid. By the way, keep drinking beer, you ******ing morons.'

Share this post


Link to post
Share on other sites
God, wouldn't it be great if they actually put that stuff into their 'news' reports instead of the colour dress Kiera Knightly wore to her latest premiere, or whatever?

But then, that would mean Joe Public might actually be shaken out of their dumb-ass reverie and we wouldn't want them coughing up their weetabix, now would we?

As the magificent Bill Hicks once said: 'Go back to bed, America. Your government is in control. Here's Love Connection. Watch this and get fat and stupid. By the way, keep drinking beer, you ******ing morons.'

I thought she looked lovely on the front of the Telegraph today. Purple is one of my favourite colours.

Share this post


Link to post
Share on other sites

What a difference a year makes. EA news from August 04

100 up for Countrywide Franchising

Five years on — the century landmark and more offices to come in the busiest year yet...

Countrywide Franch-ising, part of the UK’s largest estate agency group, have cracked open the champagne to celebrate the landmark opening of their 100th Bairstow Eves residential estate agency franchise branch, in only their 5th year of operation.

The milestone branch is in Monmouth, and is also the eighth outlet for Countrywide’s largest franchisee, Ross Estate Agencies, whose directors Jeff Cook and Alan Bidmead, are well on the way to achieving their target of 12 branches in five years.

Jeff and Alan, who have a combined 60 years’ experience in estate agency, say the franchise model was an ideal way to build a new network of branches rapidly and profitably.

“Most of what we would have had to create ourselves to set up a new business, such as marketing, systems and procedures came off the shelf as a ready-made model with Countrywide,” said Alan Bidmead.

“That allowed us to spend time where it really mattered, developing our staff and focusing on business growth.

“Countrywide provide the necessary hands-on training and launch support, and co-ordinate and package arrangements through their suppliers.

“That has enabled us to get up and running in each branch with the minimum of fuss.

“Basically, the franchise package gives us the benefit of a big brand to attract and service customers backed up by the resources of a national organisation as needed, but without the hassles usually associated with corporate frameworks.

“Given our experience in the business, we don’t want ‘big brother’ interference on a day-to-day basis. The major advantage with Countrywide is that they understand the business inside out. They operate very flexibly, which is how we like it.”

Alan Snowball, managing director of Countrywide Franchising, who announced the franchising plan exclusively in our November 1999 issue, is delighted to have reached the 100-office landmark.

“Our model is intended to cater for the needs of industry and non-industry franchisees alike,” he said.

“It allows us to combine effectively the best of both worlds — national brand and local independence.

“We are there to provide support and advice when we are needed, and we stay in the background when we are not.

“We know what adds value to a business and concentrate on providing benefits which are revenue generating or improve the bottom line.”

This is proving to be Countrywide’s busiest year yet in terms of franchising activity.

At the half year point of 2004, Countrywide had increased the size of the franchise network year on year by around 50 per cent, while over the corresponding period the sales turnover of the network more than doubled.

Mr Snowball forecasts that the company will have signed up a further 70 franchised branches and opened over 40 more by the end of the year.

“Considering that most of the franchised branches are cold starts by franchisees with no industry experience, this is remarkable progress,” he said.

“This year’s openings will mark a sharp acceleration in Countrywide’s programme to develop the Bairstow Eves branch network, already at over 300 branches, through franchising.

“Bairstow Eves is only one of Countrywide’s 22 estate agency brands but it is by far its biggest. There are over 100 Bairstow Eves branches inside the M25, making it London’s largest estate agency network by far.

“It is the only one of the UK’s top brands which has been expanding; indeed the other top brands have either been closing branches or consolidating.

“We plan to expand the Bairstow Eves network to well over 500 outlets by opening new franchised outlets.”

Countrywide plc, the UK’s largest estate agency with over 800 owned offices, set up Countrywide Franchising in 1999 with the intention of expanding the estate agency network and opened its first franchised office in February 2000.

The majority of the 100 branches opened since have been cold starts, under Countrywide’s biggest brand, Bairstow Eves, with signed commitments obtained to open well over 200 locations in total.

Countrywide operate two franchise models — single location and area. They call their area concept ‘core franchising’. The single branch franchise runs for five years with the right to renew for a further five, while area developers commit to open a minimum of five or 10 branches over a five-year timeframe under a 20-year agreement.

A Bairstow Eves franchise for a single location involves a start up fee of £12,500 and a total investment of £75,000-£100,000, whilst a core franchisee, who will pay less per location, will need minimum capital of £250,000 to develop a five-branch area or £500,000 for a 10-branch area. Countrywide now has 17 core franchises with several more under negotiation.

Countrywide’s model provides for core franchisees such as Cook and Bidmead to set up local partnerships instead of employing managers.

Jeanne Fry Thomas and Gavin Williams are both experienced estate agents, in the Ebbw Vale / Brynmawr and Aberdare areas respectively, who have opted for the branch partnership route, in conjunction with Ross, in preference to setting up as individuals.

Both were previously managers and Jeanne says: “I had always wanted to have my own estate agency, so when the chance came along to set up with the support of Ross and Countrywide I liked the sound of it.

“It’s been a good decision. We’ve been extremely successful, so much so that I am about to open my third branch, just 18 months after opening my first. Franchising really works — I would recommend it to anyone.”

Jeanne’s views are backed up by Gavin, who opened his cold start in June. “It’s been a dream start.” he said. “We achieved 31 sales in our first two months — that’s a record for a Bairstow Eves franchise branch.” Gavin is already planning a further two branches.

All of Countrywide’s franchisees tie for financial services to Countrywide’s own mortgage operation, Countrywide Principal Services which offers two alternative models — introducer and intermediary.

The intermediary option will change to ‘appointed representative’ from October 31, when mortgages become regulated by the Financial Services Authority.

Under Countrywide’s system, all franchised branches are introducers but franchisees can opt to set up as intermediaries, either by employing their own consultants or by appointment as intermediaries personally, earning income from the sale of mortgages, general insurance and life protection products.

One franchise which opted to become an intermediary is owned by Dave Henderson and Maz Hussain, the franchisees for Wakefield, with Maz running the intermediary business.

Some 12 months after the launch of their first outlet they are now planning to become the core franchisee for the Wakefield/South Leeds area and to open a further four branches.

Maz and Dave are from an IT background, a testimony, points out Mr Snowball, that Countrywide’s non-industry franchisees are as successful and pleased as their industry counterparts.

Maz said: “Coming from a non-industry background, we wanted to work with a proactive company which would help us develop a successful business.

“After only a year of operation, we are firmly established as one of the largest agents in Wakefield.

“We are in the process of recruiting another mortgage consultant for our intermediary business and planning to set up both a second branch and a core franchise.

“Countrywide’s model has worked well for us and we’ve had plenty of support and advice.”

Gary and Mandy Stephens, franchisees for Newark, Nottinghamshire, are also non-industry recruits for whom the franchise has worked.

They launched their branch in June 2003 and have recently signed up for a further two branches.

“We’re really pleased with the way things have gone,” said Gary. “Countrywide helped us to recruit an excellent team and have given us all the support and advice we need. We’re confident enough in the success of the venture to invest further.

“As non-industry franchisees, we’ve quickly learned how to operate an estate agency with Countrywide’s help and systems. It’s a very professional set-up.”

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.