Page last updated at 17:01 GMT, Friday, 6 June 2008 18:01 UK

Estate agents 'facing job purge'

Man looking in estate agent's window
Estate agents are braced for a shakeout in the industry

Up to 15,000 estate agents could lose their jobs this year due to the sagging housing market, research has suggested.

Estate agents are most vulnerable to a sharp slowdown in activity in business services, the Centre for Economics and Business Research (CEBR) has concluded.

But up to 40,000 jobs could be lost in the sector as a whole, it believes, with lawyers, accountants, architects and marketing professionals affected.

The service sector shrank in May for the first time in five years.

Uncertainty

Rising energy and transport costs are hurting businesses, the Chartered Institute for Purchasing and Supply reported on Thursday, undermining confidence in future prospects.

Most leading analysts are predicting falls in house prices this year, with the most pessimistic forecasters expecting a double-digit drop in average prices.

Estate agents and others involved in managing real estate are likely to find the next 12 months particularly tough
Jorg Radeke. CEBR

This uncertainty, combined with the rise in the cost of mortgages, has significantly reduced the number of new mortgage approvals and is subduing the number of completed sales.

CEBR said it expected the value of activity in the housing sector to fall 3%, in real terms, this year and that 5% of those working in the industry could lose their jobs.

It predicts total employment in the real estate sector will fall from 292,000 to 277,000.

"Estate agents and others involved in managing real estate are likely to find the next 12 months particularly tough and there will be extensive job cuts," said the CEBR's Jorg Radeke.

But CEBR expects the sector to start to recover next year although it argues that employment will not return to 2007 levels until 2011.

"As real estate is among the first to face the economic downturn, it will also be among the first to benefit from a future economic upturn," Mr Radeke added.



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