House price decline claims scalps among estate agents

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The Independent Online

The slowdown in the housing market has sent scores of estate agents to the wall, a property expert said today as it reported another fall in asking prices.

The slowdown in the housing market has sent scores of estate agents to the wall, a property expert said today as it reported another fall in asking prices.

Rightmove, a property website, said agents who had failed to adapt to the sudden change in the market had been left with large stocks of over-priced properties.

Miles Shipside, commercial director at Rightmove, said some estate agents had abandoned their "booming price mindset" six months ago and were now selling again.

"Others who reacted too late have large stocks of over-priced properties and face some desperate months ahead," he said. "We are seeing some agents go out of business and more will follow as the pick-up in activity will come too late."

He said there were signs that agents were persuading vendors to attach a "sensible" price tag to properties to secure a sale. "House prices appear to be correcting to a level where the bargain hunters come in," he said. "That is already happening in some areas where estate agents and sellers recognise it's the only way to achieve a sale."

It is understood some 50 agents out of the 6,800 that are part of the Rightmove network have gone out of business, shut down their sales arms or been taken over since November - or about 0.75 per cent of the total.

Last month Harry Hill, the chief executive of Countrywide, the UK's largest estate agent, which has had to issue three profit warnings, warned that a tenth of the UK's 11,000 agents - or more than 1,000 firms - could go out of business.

Mr Shipside said: "Agents only get paid on completion of a sale so even if the market picks up some agents will be looking at seven or eight months without an income. Quite a few people in estate agents were not around in the last tough market and quite genuinely are not experienced to cope with it."

Peter Bolton King, the chief executive of the National Association of Estate Agents (NAEA), said there was anecdotal evidence of agents going to the wall.

"I'm aware there have been a number of closures around the country," he said. "For instance two have closed in Banbury - which is a good example because that was simply a town with too many agents.

"It's not good for anyone losing their jobs but a tough market is a good thing because it allows good agents, like cream, to rise to the top because they have to do a proper selling job."

However, he said NAEA figures to be published in the next few days would show a marked surge in activity in the first few days of 2005.

"In some areas of the country, the days between Christmas and New Year turned out to be far more encouraging than would normally be expected," he said. "We are getting feedback from the early days of January that particularly in London, Sussex, Essex and Lancashire there has been a significant uplift of new applicants registering."

Rightmove said the average asking price had dropped by 0.1 per cent so far this month, after falls of 0.3 and 1.7 per cent in December and November. Prices have fallen in five out of the past six months and have dropped by 3.4 per cent since they peaked in July last year. Sales remained slow, homes are taking longer to sell and stocks of unsold properties remain high, it said.

Mr Shipside said first-time buyers should consider "stretching" their finances to snap up a cut-price property now, rather than wait for a boom fuelled by a rate cut.

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