THEY are trusted with the biggest investment many of us will ever make in our lifetime – but new insolvency research has revealed the number of estate agencies going out of business has gone through the roof.
Across Leeds, Bradford, Halifax, Huddersfield, Harrogate, York, Sheffield, Newcastle, Sunderland, Darlington, Durham and the rest of our towns and cities in Yorkshire and the North East, property companies dominate the High Street.
But the “deceptively spacious” market in which they have long operated is contracting at an alarming rate, reports the insolvency media.
So much so that insolvency experts are now warning that as many as 500 estate agencies nationwide face going bust this year if current trends and tough market conditions don’t improve.
That equates to as many as 10 businesses becoming insolvent and disappearing from the UK High Street every week, having failed to restructure and rescue their company amid growing financial challenges.
Drawn from official Insolvency Service data, the research draws a link between the EU referendum and a spike in insolvencies. It reveals that the rate of insolvencies has doubled in the three years since the vote.
Number-crunching, the insolvency statistics show that 371 property companies have entered insolvency proceedings in the first nine months of this year, including 348 in England and Wales, and 30 in Scotland.
In 2016, just 185 agents went bust although that year insolvencies increased by 16% within the industry.
Ongoing Brexit negotiations, and uncertainty surrounding the upcoming General Election, have only served to cause further market jitters and ramp up insolvency fears as we prepare to enter 2020. So too has a dip in house prices and a reduction in the number of transactions, as homeowners choose to stay put.
Property industry expert David Alexander, whose company initiated this insolvency research, said the results highlighted the joint impact of a declining High Street and a changing marketplace.
He told the insolvency press: “The problems faced by the High Street are impacting on all businesses regardless of sector as we can see from the recent insolvency of Thomas Cook, the problems facing Mothercare, and the numerous restaurant chains which have closed their doors over the last year. These are issues of long leases, high rents and rates and declining footfall.”
He warned that customers under-40 run their lives through their phones, tablets and computers and that “this group would never consider going into an estate agent’s office for information and they are the future, so the market must shift to cater for this group”.
Whether, to coin an estate agency term, the sector “would benefit from modernisation” remains to be seen.
Yet as we approach its busiest time of the year, as homebuyers strive to move in ahead of the festive season, there is no doubt that estate agencies in Yorkshire and the North East could do with some Christmas cheer.
Here at Walsh Taylor, when financial difficulties arise, we’ll put time on your side.
For more information on how our licensed insolvency practitioners and business recovery teams in Leeds, Bradford, Harrogate and Darlington can help you, please call us on 03300 244 660 or email firstname.lastname@example.org