Experts have warned that up to 50,000 estate agents may lose their jobs in the next year
As many as 50,000 estate agents could lose their jobs by next Autumn because of the worsening economic crisis, experts today warned.
Economists said the collapse in the housing markets meant the true figure would be double previous predictions of 15,000 job losses, with some experts forecasting at least 50,000 out of work by next year.
The panic has led to some businesses making desperate attempts to secure their survival, with one estate agent even converting part of his office into a cafe to generate extra income.
Ben Read, managing economist at the Centre for Economics and Business Research, said the toll of job losses would be shocking.
He told the Evening Standard: ‘It will definitely be worse. The housing market has dropped significantly more since May and the outlook for the next nine months is pretty ropey.
‘Because of the worsening situation in the economy you could easily expect that figure of 15,000 to go up by 50 per cent. The true figure could even be as much as 50,000.
‘Most estate agents have let go significant numbers of staff and are working on skeleton staff. I’m sure it will surprise everyone how bad it is.’
Mr Read said the fall in house prices and lack of transactions taking place meant inevitable job losses for staff working on commission – either being fired, made redundant, or voluntarily looking for other jobs because of the lack of income.
Gary Anderson, 38, a partner with Davies & Davies estate agents in Hackney, said everyone in the industry was fearing for their future.
‘We have let someone go and know other firms have done the same. People are worried – prices are down 20 per cent from last year and still coming down,’ he said.
‘It is very difficult now to buy. People have to put down 35 per cent deposits – it is a hell of a lot for people to stump up.
Downturn: The New King’s Road branch of Felicity J Lord closed its doors
‘Mortgage arrangement fees costing thousands of pounds are also putting people off.’
Emma Whitham, 29, a sales manager with Ludlow Thompson in Islington, said the slump in the housing market had led to a 50 per cent reduction in properties on their books.
She said: ‘Prices are lower than they have been for years – we have seen a good 25 per cent drop. Of course people are worried. There is not really a massive amount of job security.’
The 29-year-old said people were too nervous to buy. She said: ‘It is so uncertain what is going to happen to house prices.
‘From 2006 to 2007 there was a massive boom so people got carried away with what properties were worth. It was not sustainable and that is why we have this problem today.’
Slump: This estate agents on Kings Road could not drum up enough business
Gina Mackenzie, director at Hamptons in Islington, said their number of properties for sale had dropped from 331 to 105 in the past 12 months.
She said: ‘Clients realise the penny has dropped – the market is not the same as 2006/2007… but in sales you have to be good at your job.
‘It is harder and there will be more casualties, but maybe they are the ones that should not be in the industry in the first place.’
She said that some agents had simply ‘given up’.
‘There is so much lethargy – they act like it is dead and that is madness. It has been a bloody hard year but there is still a market,’ she said.
Chris Brown, president of the National Association of Estate Agents, said the last few months had been like ‘Armageddon’.
Many estate agents were moving into lettings for regular incomes, rather than the high-money commission sales, he said.
Others were looking at becoming independent sales advisers.
He said: ‘The damage has been done, it is make or break. If businesses can’t make it pay now, the only other option is to look at closure. It is a very, very tough time.’
Some leading estate agents are being forced to close some of their flagship branches as the country’s housing market slump deepens.
London has been particularly badly hit with firms pulling down the shutters at offices in prime locations across the capital.
Branches closed include the Felicity J Lord branch at 100 New Kings Road, Fulham and the Friend & Falcke branch in Kings Road.
By Daily Mail Reporter
Last updated at 11:27 AM on 17th November 2008
Source: Daily Mail