BBC News

Magazine

Page last updated at 09:00 GMT, Monday, 20 October 2008 10:00 UK

How are estate agents surviving?

Graphic of For Sale signs

By Dhruti Shah
BBC News

The number of properties being sold across the UK has hit a 30-year low. So how are estate agents managing to survive?

Phrases like "would suit DIY enthusiast", "efficient use of space" and "incredible potential" have made them figures of fun.

But estate agents - with their unique line in salesmanship - are struggling through a very dark period. In September, they sold on average less than one property per week each, the worst since 1978, says the Royal Institution of Chartered Surveyors.

Halifax Estate Agents has announced plans to close 53 of its High Street branches by the end of 2008, while the Centre for Economics and Business Research has estimated 15,000 estate agents will have lost their jobs by the same date.

"The agents are carrying out the most sensible course of action and doing what any business would do in this sort of situation," says Chris Wood, president-elect of the National Association of Estate Agents. "They're cutting costs wherever they can.

Chris Wood
For some agents this is a time of karma - the wide-boys are being kicked out
Chris Wood
NAEA

"Some have to make staff redundant, others are employing part-timers and those that want to survive will have to up their game."

He said agents no longer expected to earn high commissions on top of their basic salary because the industry could no longer work that way.

He says: "When the markets are booming many agents are happy to work for the commission but when they are falling, a lot of junior negotiators have to rely solely on the minimum wage.

"Plenty of agents have had to take a pay cut and plough a lot more of their own money into their businesses. That can be hard."

Estate agent Lesley Gauder, who works for independent company PMIS in Solihull in the West Midlands, agrees times are very hard.

I'm even considering getting a job stacking shelves at Tesco to get some extra cash
Lesley Gauder
Estate agent, PMIS

"There are just three of us in the company and we've had to make a lot of cutbacks," she says. "We're considering pulling a lot of our advertising even though this is something we rely heavily on.

"The owner is using up the last of his savings to keep us afloat and I'm on half salary. Some weeks we don't even pay ourselves as we have to keep aside money to pay our rent.

"We've resorted to buying cheaper teabags and coffee because the situation is that difficult."

"I'm even considering getting a job stacking shelves at Tesco to get some extra cash."

Some agents are fighting back and one chain in south-west London is reported to have abolished its fees on any sale before the end of the year. Others say they're subscribing to Darwinian principles to get through the downturn.

Cars downgraded

"We have survived so far because we keep reinventing ourselves and putting in the long hours," says Kevin Allitt, managing director of Oystons Estate Agents in Blackpool.

"We're reluctant to start cutting fees but we know we have to be aware of how to attract people back into the market.

Man walks past estate agent
It's been a very tough year, say agents

"I know of people who have downgraded their cars and I've cut my pay by half. One or two people in my office volunteered to take pay cuts too. There isn't any other option."

His workforce has been halved and although he has not had to shut down any of his branches, 20 of his competitors on the Fylde coast have been forced to close.

Ben Brandt of the London property website TheRatAndMouse.com says: "This is going to sort the wheat from the chaff and the estate agents left standing in two years are going to be great agents."

Agents are being forced to innovate to survive, he says, citing an initiative by the upmarket agents Hamptons called Hamptons Exchange.

Smug

Under the scheme, wealthy buyers at the top of a property ladder can buy a smaller property at the bottom to free up the chain. It's then passed over to the agent's letting department.

Even the smaller independents are offering special deals, trying to ease the pain for sellers by negotiating on their behalf to get a discount on the property they want to buy.

But deals won't be enough because only quality agents offering a consistently good service can expect to survive, says Mr Wood.

"The smug ones who give estate agents a bad reputation will find it hard to battle through.

"For some agents this is a time of karma - the wide-boys are being kicked out."


Below is a selection of your comments.

One problem is that there far too many estate agents. I live in a large village which has one of most shops but five estate agents. It's madness.
Stuart, Knebworth

I'm trying to buy a house at the moment, and despite everything, the estate agents I've been dealing with have STILL often been disorganised, unhelpful, and apparently not much motivated in achieving a sale. In their shoes I'd be moving heaven and earth to get a sale right now.
Jess, Banbury

Estate agents have been operating a price-fixing cartel for years. In recent years the sum they have been taking to sell a property has doubled, along with house prices. Would any of them consider lowering their commission rate to take account of this? Not likely.

They must now take the rough with the smooth: just like the rest of us.
Bill, Bristol

While times are hard for estate agents they have had it very good for many years now. If they have assumed (like a lot of people) that the boom would go on for ever then they are more foolish than the man on the street because they of all people should know that the property market moves in cycles and set some money aside for the hard times.
Mike , Exeter UK

What makes Lesley Gauder so sure she will be able to get a job in Tesco? I have a friend who is struggling to find a part time job in retail!
Julie W, Wolverhampton, UK

I am sorry for many people who have lost their livelihood. However, most estate agents lacked integrity and operated in a dishonest manner. I don't think many will feel sorry for their plight.
Batia, London

There will be a substantial number of estate agents that go out of business altogether in the next 18 months. Most are only surviving on the back of their lettings business & but this cannot continue long term. Housebuyers' habits are changing & future house purchasers will use the Internet to source properties. There will therefore be less requirement for the high street estate agent & they will simply disappear over time.
Mark, Hertfordshire

It's hard to sympathise with estate agents. In a bull market houses virtually sell themselves so the agents rake in their exorbitant fees for doing practically nothing, but in a bear market there's nothing they can do to help the sale other than advise the seller to drop the price.
Russell Wade, Guildford

Why the panic?! Estate agents don't have to worry if they lose their jobs as there are plenty of jobs out there stacking shelves and the qualifications required for these jobs are the same as for an estate agent.
Sanjay, Birmingham



Print Sponsor


RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites

FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC iD

Sign in

BBC navigation

Copyright © 2017 BBC. The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific