One in five high street estate agents 'at risk of going bust'

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One in five high street estate agents are at risk of going bust after a boom in online companies, research has shown.

Nearly 5,000 estate agents are showing signs of “financial distress”, as they struggle to compete with low-cost and fixed fee online agents, accountancy firm Moore Stephens said.

Traditional companies are likely to have higher property and staff costs and their role is being undermined by the growth in property websites, the study suggested.

Mike Finch of Moore Stephens said: “Traditional high street estate agents’ profit margins are being squeezed from both sides, from cut price online competitors, to their larger counterparts on the high street who are forcing them to up their spending or give up the race.

“Many areas across the UK are over-saturated with estate agents, and competition is becoming too much for some smaller businesses.”

The study follows a dramatic slump in profits announced last week at two of the UK’s biggest estate agents.

Countrywide, the UK’s biggest listed estate agency, said pre-tax profits for the six months to June were £447,000, down from £24.3 million in the same period last year.

Revenues and profits at Foxtons also fell in the first half as the London-focused estate agent pointed to “unprecedented” economic and political uncertainty hitting the property market.

The group said revenue fell 15 per cent to £58.5 million in the six months to June 30, with pre-tax profit plummeting 64 per cent from £10.5 million to £3.8 million.

Additional reporting by Press Association.

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