Nationwide sells estate agencies

NATIONWIDE, Britain's second-largest building society, yesterday joined the growing list of companies that have finally written off their 1980s foray into the estate agency business as an expensive mistake.

Nationwide agreed to sell its 300-strong chain of agents, in which it has lost pounds 200m over the past seven years, to Hambro Countrywide for pounds 1.

The deal places Hambro Countrywide, which until three years ago was in the second league among estate agency chains, firmly at the top of the market, with 750 branches. It gives the chain 6 per cent of sales of the UK's total residential market.

Harry Hill, managing director of Hambro Countrywide, said the company had succeeded because it concentrated on selling residential properties rather than boosting its mortgage-lending business.

'In the past, there was a temptation by building societies to see a move into this business as an opportunity for more mortgage- lending. Arguably this has been an expensive mistake,' Mr Hill said. 'This will allow the (Nationwide) estate agency chain to go back to what it is best at - selling homes.'

Hambro Countrywide is also buying Nationwide's separate surveying business, which employs nearly 600 people, for pounds 12m. About 250 vehicles are included in the price.

Nationwide Surveyors made pre-tax profits of pounds 4.18m in the year ended 31 March, on turnover of pounds 24m. Under the terms of the agreement, the business passing into the hands of Hambro Countrywide will have cash assets of not less than pounds 10.5m, plus other assets of pounds 8.5m.

The building society has agreed to accept pounds 12m-worth of shares in Hambro Countrywide as payment for the surveying business. It will then sell back half these shares to Hambros, the merchant bank that owns 52 per cent of the estate agency subsidiary. Nationwide will keep the remaining shares for at least two years.

In keeping with the new owners' decentralised strategy, branches will either revert to the names they had before being taken over by Nationwide or will be part of the Bairstow Eves chain of estate agents, also owned by Hambro Countrywide.

Among other losers in this deal is Guardian, the life insurance company formerly known as Guardian Royal Exchange. Two years ago, GRE bought an undisclosed stake in Nationwide's estate agency business, increasing this to 49 per cent. Nationwide last week bought Guardian's share of the business to expedite the sale.

A Guardian spokesman said its venture into the business had cost it pounds 50m. He declined to state how much Guardian's stake was sold for.

Brian Davis, Nationwide's chief executive, said: 'We will now be able to concentrate more effectively on our core financial services business, generating significant additional mortgage volumes.'

Analysts hailed the deal as good for Hambro in the long term. Prudential was paying pounds 500,000 per branch at the height of the 'feeding frenzy' for estate agencies in the late 1980s, while other smaller chains were paying pounds 250,000.

Estate agencies were identified as the key point of sale by building societies and life companies for housing-related products such as mortgages, endowment policies and insurance. The downturn in the housing market and disappointing cross-selling figures damaged this vision, forcing the Pru and then Abbey National to bale out.

Among the building societies, Bristol & West has cut its chain and Northern Rock has shed the branches it held. Yorkshire Building Society put its estate agencies up for sale last August. Halifax has reduced the number of its own branches from 550 to 520.

------------------------------------------------------------------------ HOW MUCH THE BIG CHAINS ARE LOSING ------------------------------------------------------------------------ No of offices No of offices Profit (loss) now end 1992 1993(pounds m) Halifax Property Services 530 550 (4) Royal Life Estates 484 517 (16) Hambro Countrywide* 449 473 4.3 Nationwide Estate Agents* 303 303 (13.86) Black Horse Agencies 360 393 (0.8) General Accident Property Services 360 390 (9.5) Cornerstone 344 355 ** Woolwich Property Services 240 257 (3.4) * Before yesterday's announcement. ** First year of trading since sold by Abbey National, no figures available. ------------------------------------------------------------------------

Ulster bright spot, page 29

PROMOTED VIDEO
Arts and Entertainment
Neil Young performs on stage at Hyde Park
musicAnd his Hyde Park set has rhyme and reason, writes Nick Hasted
News
Women have been desperate to possess dimples like Cheryl Cole's
people Cole has secretly married French boyfriend Jean-Bernard Fernandez-Versini after just three months.
Arts and Entertainment
AKB48 perform during one of their daily concerts at Tokyo’s Akihabara theatre
musicJapan's AKB48 are one of the world’s most-successful pop acts
News
Ian Thorpe has thanked his supporters after the athlete said in an interview that he is gay
people
News
The headstone of jazz great Miles Davis at Woodlawn Cemetery in New York
news
Arts and Entertainment
Brendan O'Carroll has brought out his female alter-ego Agnes Brown for Mrs Brown's Boys D'Movie
filmComedy holds its place at top of the UK box office
News
ebookA unique anthology of reporting and analysis of a crucial period of history
News
newsBear sweltering in zoo that reaches temperatures of 40 degrees
Arts and Entertainment
Professor Kathy Willis will showcase plants from the Royal Botanic Gardens at Kew
radioPlants: From Roots to Riches has been two years in the making
Extras
indybestThe tastiest creations for children’s parties this summer
Arts and Entertainment
TV The follow-up documentary that has got locals worried
Arts and Entertainment
Paolo Nutini performs at T in the Park
music
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Sales Executive - Central London /Home working - £20K-£40K

£20000 - £40000 per annum: Deerfoot IT Resources Limited: Sales Executive - Ce...

HR Advisor - 6 months FTC Wimbledon, SW London

£35000 - £40000 per annum + Benefits: Ashdown Group: HR Advisor - 6 Months Fix...

Information Security Manager (ISO 27001, Accreditation, ITIL)

£70000 per annum: Harrington Starr: Information Security Manager (ISO 27001, A...

Biztalk - outstanding opportunity

£75000 - £85000 per annum + ex bens: Deerfoot IT Resources Limited: Biztalk Te...

Day In a Page

Super Mario crushes the Messi dream as Germany win the 2014 World Cup in Brazil

Super Mario crushes the Messi dream

Germany win the 2014 World Cup in Brazil
Saharan remains may be evidence of the first race war, 13,000 years ago

The first race war, 13,000 years ago?

Saharan remains may be evidence of oldest large-scale armed conflict
Scientists find early warning system for Alzheimer’s

Scientists find early warning system for Alzheimer’s

Researchers hope eye tests can spot ‘biomarkers’ of the disease
Sex, controversy and schoolgirl schtick

Meet Japan's AKB48

Pop, sex and schoolgirl schtick make for controversial success
In pictures: Breathtaking results of this weekend's 'supermoon'

Weekend's 'supermoon' in pictures

The moon appeared bigger and brighter at the weekend
Iraq crisis: How Saudi Arabia helped Isis take over the north of the country

How Saudi Arabia helped Isis take over northern Iraq

A speech by an ex-MI6 boss hints at a plan going back over a decade. In some areas, being Shia is akin to being a Jew in Nazi Germany, says Patrick Cockburn
The evolution of Andy Serkis: First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes

The evolution of Andy Serkis

First Gollum, then King Kong - now the actor is swinging through the trees in Dawn of the Planet of the Apes
You thought 'Benefits Street' was controversial: Follow-up documentary 'Immigrant Street' has got locals worried

You thought 'Benefits Street' was controversial...

Follow-up documentary 'Immigrant Street' has got locals worried
Refugee children from Central America let down by Washington's high ideals

Refugee children let down by Washington's high ideals

Democrats and Republicans refuse to set aside their differences to cope with the influx of desperate Central Americas, says Rupert Cornwell
Children's books are too white, says Laureate

Children's books are too white, says Laureate

Malorie Blackman appeals for a better ethnic mix of authors and characters and the illustrator Quentin Blake comes to the rescue
Blackest is the new black: Scientists have developed a material so dark that you can't see it...

Blackest is the new black

Scientists have developed a material so dark that you can't see it...
Matthew Barzun: America's diplomatic dude

Matthew Barzun: America's diplomatic dude

The US Ambassador to London holds 'jeans and beer' gigs at his official residence – it's all part of the job, he tells Chris Green
Meet the Quantified Selfers: From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor

Meet the 'Quantified Selfers'

From heart rates to happiness, there is little this fast-growing, self-tracking community won't monitor
Madani Younis: Five-star reviews are just the opening act for British theatre's first non-white artistic director

Five-star reviews are just the opening act for British theatre's first non-white artistic director

Madani Younis wants the neighbourhood to follow his work as closely as his audiences do
Mrs Brown and her boys: are they having a laugh?

Mrs Brown and her boys: are they having a laugh?

When it comes to national stereotyping, the Irish – among others – know it can pay to play up to outsiders' expectations, says DJ Taylor