Receivers move in at Cornerstone chain

Economy: Pressure mounts for further reduction in borrowing costs as housing slump claims another corporate victim

JOHN WILLCOCK

Financial Correspondent

The remaining 70 branches of what was once the UK's largest privately owned estate agency, Cornerstone, were put into receivership yesterday with the loss of 250 jobs. The failure emphasises the continuing severity of the housing slump.

Cornerstone has already sold off its other 280-odd branches over the last year or so, mainly to small independent agencies. Over 200 of those sold still have the Cornerstone name but are unaffected by the receivership and will continue to trade normally.

Cornerstone was the subject of a pounds 7.3m management buyout from Abbey National two years ago by Tony Snarey and Bill McClintock. At that time Cornerstone had 347 offices and 1,800 staff. Abbey lost a total of over pounds 240m on the chain between its launch in 1987 and Abbey's withdrawal from the estate agency market in August 1993.

The latest receivership confirms a trend in which small estate agents have been able to buy back the same offices they sold to large institutions in the 1980s for inflated prices. Many of the large chains created in the boom, such as the 800-strong Prudential Property Services, have since disintegrated, being sold back to small firms.

Mr Snarey was understood to be angry about yesterday's receivership, and was particularily criticial of government policy towards the housing sector.

Those offices now in receivership are mainly in the West Country and on the south coast. Cornerstone was largely supported by the giant Swiss insurer Winterthur Life, formerly Provident Life, which funded the buyout.

The branches will close, although receivers Ernst & Young assured customers that current transactions will continue. Around 40 staff are being kept on in a number of offices to complete the existing workload.

The receivers have said they have already received 100 approaches from potential buyers.

The joint receiver Alan Lovett said: "One of our first concerns is to promote a point of contact for the Cornerstone customers affected by the receivership.

"A number of offices in the West Country and on the south coast will remain open to ensure that all current housing transactions and related issues are dealt with efficiently."

Mr Lovett said a communications programme would be put in place to contact customers directly affected.

The receivers said it was "early days" to speculate about whether all the workers would be made redundant; they would be assessing the viability of the 70 branches in the hope of saving as many jobs as possible.

Cornerstone made losses of roughly pounds 20m a year between 1989 and its sale in 1993. Since then housing transactions have fallen by a quarter.

Before moving to Cornerstone Mr Snarey helped Royal Insurance to build up an 800-strong chain in the 1980s, the biggest group in the country. He made a killing by selling his own small chain of offices to Royal, and eventually reinvested the money in the Cornerstone buyout. But by then the housing slump had taken hold and has stubbornly refused to improve.

A customer helpline has been set up: telephone 01734-522432.

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
SPONSORED FEATURES
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Collections Agent

£14000 - £16000 per annum: Recruitment Genius: This company was established in...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE 40k: SThree: SThree are a global FTSE 250 busi...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + competitive: SThree: SThree are a global FTSE 250 ...

Reach Volunteering: Trustees with Finance, Fundraising and IT skills

Voluntary and unpaid, reasonable expenses reimbursable: Reach Volunteering: St...

Day In a Page

Isis profits from destruction of antiquities by selling relics to dealers - and then blowing up the buildings they come from to conceal the evidence of looting

How Isis profits from destruction of antiquities

Robert Fisk on the terrorist group's manipulation of the market to increase the price of artefacts
Labour leadership: Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea

'If we lose touch we’ll end up with two decades of the Tories'

In an exclusive interview, Andy Burnham urges Jeremy Corbyn voters to think again in last-minute plea
Tunisia fears its Arab Spring could be reversed as the new regime becomes as intolerant of dissent as its predecessor

The Arab Spring reversed

Tunisian protesters fear that a new law will whitewash corrupt businessmen and officials, but they are finding that the new regime is becoming as intolerant of dissent as its predecessor
King Arthur: Legendary figure was real and lived most of his life in Strathclyde, academic claims

Academic claims King Arthur was real - and reveals where he lived

Dr Andrew Breeze says the legendary figure did exist – but was a general, not a king
Who is Oliver Bonas and how has he captured middle-class hearts?

Who is Oliver Bonas?

It's the first high-street store to pay its staff the living wage, and it saw out the recession in style
Earth has 'lost more than half its trees' since humans first started cutting them down

Axe-wielding Man fells half the world’s trees – leaving us just 422 each

However, the number of trees may be eight times higher than previously thought
60 years of Scalextric: Model cars are now stuffed with as much tech as real ones

60 years of Scalextric

Model cars are now stuffed with as much tech as real ones
Theme parks continue to draw in thrill-seekers despite the risks - so why are we so addicted?

Why are we addicted to theme parks?

Now that Banksy has unveiled his own dystopian version, Christopher Beanland considers the ups and downs of our endless quest for amusement
Tourism in Iran: The country will soon be opening up again after years of isolation

Iran is opening up again to tourists

After years of isolation, Iran is reopening its embassies abroad. Soon, there'll be the chance for the adventurous to holiday there
10 best PS4 games

10 best PS4 games

Can’t wait for the new round of blockbusters due out this autumn? We played through last year’s offering
Transfer window: Ten things we learnt

Ten things we learnt from the transfer window

Record-breaking spending shows FFP restraint no longer applies
Migrant crisis: UN official Philippe Douste-Blazy reveals the harrowing sights he encountered among refugees arriving on Lampedusa

‘Can we really just turn away?’

Dead bodies, men drowning, women miscarrying – a senior UN figure on the horrors he has witnessed among migrants arriving on Lampedusa, and urges politicians not to underestimate our caring nature
Nine of Syria and Iraq's 10 world heritage sites are in danger as Isis ravages centuries of history

Nine of Syria and Iraq's 10 world heritage sites are in danger...

... and not just because of Isis vandalism
Girl on a Plane: An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack

Girl on a Plane

An exclusive extract of the novelisation inspired by the 1970 Palestinian fighters hijack
Why Frederick Forsyth's spying days could spell disaster for today's journalists

Why Frederick Forsyth's spying days could spell disaster for today's journalists

The author of 'The Day of the Jackal' has revealed he spied for MI6 while a foreign correspondent