Nationwide to shed 300 staff by closing 58 estate agencies

Click to follow
The Independent Online
NATIONWIDE, the second-largest building society, is closing 58 of its estate agency offices with the loss of 300 jobs.

The society had 510 estate agency offices in 1989 and has been gradually closing them. The latest closures will bring the number down to 303.

The redundancy packages will cost the society 'several million pounds', according to Brian Davis, operations director.

'We will be making efforts to find alternative employment in nearby branches, but unfortunately the opportunities are going to be limited.'

The offices will all be closed by the end of the month. Customers with property for sale through the branches being axed will be contacted by letter or telephone and arrangements made for the property to be transferred to another branch.

If there is no convenient branch, customers will have to go to a rival estate agency.

Nationwide's estate agency network has never been profitable. It has lost a total of pounds 50m in its four years of operation. Losses were down from pounds 15m in the previous year to pounds 12m in the year to April 1992.

The closures are across the country with fewer in the North and more in the South and West.

Mr Davis said there were signs that the property market might pick up. 'A lot of people are looking. But the branches we are closing would struggle under any conditions to make a contribution.

'I know it is bad news for those involved, but those who remain can see our commitment. Some people had been questioning whether or not we would pull out of estate agency altogether.'

John Wriglesworth, the housing analyst at UBS Phillips & Drew, said Nationwide was only doing what other building societies have been doing in 'dribs and drabs to avoid attracting attention.

'Nationwide has no option for the sake of its savers but to prune the network. It's unfortunate, but otherwise it would be equivalent to throwing money down a hole.'

The property market has shrunk dramatically in the past few years. At the peak in 1988 there were 2 million property transactions. This was halved by 1992, and Mr Wriglesworth is predicting that it will rise to only 1.15 million during 1993.

Many estate agency chains have shrunk their networks. General Accident had about 590 offices at the peak, and now has 352. Royal Life had 750 at the height of the boom, and is now down to 505, and Hambro Countrywide had 520 offices in January 1989 and has brought this down to 453.

But National & Provincial - a top 10 building society - bought a chain of 15 estate agents in Leicestershire in 1991. It introduced a full range of building society services into the branches, which display the Spencers estate agency name and N&P's logo, and calls them Community Network branches.

A spokesman said it was still evaluating the strategy and had not yet decided whether to advance via estate agencies.

Comments