Estate agencies are closing branches at the rate of 150 a week, with 4,000 job losses since the start of the year.

The number of estate agency branches has fallen from about 13,000 at the start of the year to about 12,000. Removal firms have also laid off hundreds of staff after a 26 per cent fall in the number of properties changing hands over the past 12 months. The job losses are the clearest sign yet of the impact the global credit crisis and housing market slowdown have had on the wider economy. Source: Harry Wallop and Gordon Rayner.

Despite the recent government intervention in the British banking sector, unless banks and building societies increase lending to mortgage applicants, worse will come be to come. “I think House prices will drop for another 4 years and will return to 2007 levels in roughly a decade.” Daniel Tomas – Property Correspondent Financial Times. BBC Money Program - Property: The End of the Affair?

The number of mortgages approved for home buyers has fallen by 44 per cent in 12 months to its lowest level since the Bank of England began collecting data 15 years ago. Without access to mortgages, potential home buyers cannot move house, meaning a sharp fall in business for any company that depends for its trade on people wanting to move. Estate agencies have been particularly badly hit.

Debtwire, an organisation that monitors the health of companies, said the number of estate agency branches had fallen from about 13,000 at the start of the year to about 12,000. The rate of closures is accelerating and presently stands at 150 a week. Sources in the field said that with each branch employing an average of four people, the number of job losses was about 4,000.

Peter Bolton King, the chief executive of the National Association of Estate Agents, said: "The irony is that there is no shortage of people who want to move house, but without mortgages they just can't do so. "Estate agents are having to close because there just isn't enough movement in the housing market and that is likely to have a much wider impact because a healthy housing market is essential for the health of the high street. "When no one is moving, the negative feeling that creates tends to make people tighten their purse-strings. "The only way things will improve is when banks and building societies start to open up their lending criteria so people can borrow money and then the housing market will start moving again."

Last week, three leading house price indices showed that prices had started to fall in earnest, with property values lower than a year ago. Mortgage lending has been affected by the worldwide credit crisis, with first-time buyers particularly badly hit. A year ago many lenders offered 100 per cent mortgages, but now most will give only 90 per cent. This means a first-time buyer needs an average of £25,000 to cover a deposit, stamp duty and other fees. As well as 100 per cent and even 95 per cent mortgages being withdrawn, interest rates have risen, making the cost of borrowing prohibitively high for many first-time buyers.

The British Association of Removers said yesterday that hundreds of workers had been laid off as the trade went through its worst period in 20 years. Business in the first three months of this year was down 40 per cent on last year. Steve Jordan, an association spokesman, said: "The removal market is as bad as 1989-90 and possibly worse."
Source:telegraph.

Have Your Say:

Should estate agents take the blame for pushing house prices too high or are we (home owners) to blame for being greedy by expecting house prices to rise?