The latest data suggests the estate agency sector – and in particular traditional estate agents operating out of premises – are going insolvent at the rate of 10 per week.
Property management firm Apropos by DJ Alexander conducted the data analysis using insolvency service figures. They discovered that some 341 businesses involved in real estate entered insolvency proceedings during the first nine months of 2019. Only 30 of these were in Scotland indicating that the sector is in better health north of the border.
‘The downturn for estate agents corresponds with an overall cultural shift away from bricks and mortar towards ecommerce,’ comments insolvency practitioner Simon Renshaw.
‘Today’s consumers shop first from their phones and tablets. This includes real estate where the giants like Zoopla and Right Move control most of the online market. This makes survival extremely difficult for traditional estate agents without the skills, the resources or the wish to enter the competitive online world.’
2019 was the Worst Year on Record for the British High Street
Recent data from the British Retail Consortium concluded that the high street had slumped a further 0.1% in 2019 making it the worst year since records began.
“Brexit certainly played a part in this’, commented Company Debt director Mike Smith. ‘Economic uncertainty fuelled by the election has played into a mere 0.3% growth in the last quarter. That’s the slowest rate since 2010. In the real estate sector this is compounded by the fact that the proportion of people renting instead of buying has doubled in the last 20 years. Those that do buy are doing so via online portals over old fashioned interaction with their local estate agent. Ultimately, only a handful of firms with the ability and vision to reinvent themselves and provide coherent USP’s are likely to survive in the long term.’