October 2008

OUR PROFESSION 'MAY NEVER BE THE SAME AGAIN'

Report predicts major changes by the time the market recovers

THE estate agency profession, battling hard to overcome the effects of the credit crunch, may never be the same again.

That is the radical view of market intelligence provider Key Note, who claim that by the time the industry recovers from the effects of the global financial slump, it will be dramatically different from that we have known up to now.

Key Note, who have been providing commercially relevant market information to libraries, academia and businesses for almost 30 years, forecast in their latest Estate Agency Market Report that both the number of transactions and estate agency revenue will continue to decline for the rest of this year and next, with no sign of recovery likely “until at least 2010”.

By 2012, they claim, the industry will look rather different, with fewer estate agents in business and certainly far fewer on the high street.

“Estate agents will look to increase their profile on the internet much more in future,” say Key Note, pointing out that property advertising on the internet rose by around 70 per cent in 2007, and is expected to remain high this year.

“Given the growing power of the internet, many industry observers believe that the industry will not bear any resemblance to the one we see today.

“It is expected that a period of restructuring will result in a smaller market and that more people will be selling property without using an estate agent.”

The Key Note Report goes on to say: “The housing market has been on a roll for 13 years and a sizeable proportion of estate agency staff have not worked in conditions as difficult as those they are now facing.

“Many may lack the experience required to survive in such a problematical market, and some of the younger estate agents might well withdraw from the marketplace.

“Given the current dismal state of the property market and the opportunities for development on the internet, there are suggestions that the market as we know it today may not exist in 10 years’ time.

“Even before the closures of the last 12 months, voices in the industry were asking how much longer estate agents would need a presence in UK high streets.”

But Peter Bolton King, chief executive of the National Association of Estate Agents, feels the industry will “come back stronger” from the current problems caused by the credit crunch.

“I feel in this situation, the cream rises to the top and there are already some signs around the country that it is not all ‘doom and gloom’,” he said.

“It is vital for agents to have the ‘glass half full’ attitude to business. It has to be a case of getting back to basics and making sure the level of service is the very best.”