Estate agents going bust

Estate agents going bust in the UK property crash and credit squeeze - an estimated 1800 estate agents will go to the wall before the end of the year

Reports of estate agents going bust and closing down around the UK are increasing with an estimated 250 closures already this year. Considering the credit squeeze and property slump has officially only just started, many of these estate agents must have been skating on very thin ice for some time.

Start of article about rising mortgage costs.

Previous page about falling property prices.

The property boom saw estate agents springing up in every available retail unit and killing off high streets over the past decade. Many were simply people who saw the estate agency business as an way to make money; whilst others, having served their three week apprenticeship and believing the knew the ropes left their employers to set up in competition.

The lure of rich pickings drew them in thick and fast and the property crash is going to see many of them go to the wall almost as quickly. Considering estate agents are supposed to be professionals who were advising property investors how best to spend their money, it is not surprising that so many have not built a stable economic business and have folded at the first bad hand they have been dealt.

Like all recessions, when the shit hits the fan, the bloodless cull leaves the strong behind to clear up and make money when the market returns to better economic conditions. Of course estate agents are not the only victims and note I didn't use the word innocent. Property investment clubs that supposedly helped property investors find below market value properties are now struggling and have a lot of very unhappy clients pointing the finger at them. As we always said, no property developer would ever sell a property at below market value and many amateur investors are now sitting on properties worth 30% what they paid for them.

Estate agents, who have helped hyped the market up; spotty little kids who thought the bubble would never burst are now crying because the very thing they believed couldn't happen has come to pass. The buy to let landlords they rang for an extra back hander every time a cheap property cam on the market are now trying to unload their portfolios, and first time buyers who took on more they could afford are now dumping properties back into the market, sending prices into a downward spiral.

Six months ago, an estate agents problem was trying to find properties for sale. Now they have no shortage of properties but are lacking the very people who paid their commissions and who they were all too happy to stitch up. Estate agents were all too happy to bite the hand that fed them and now they are finding the food bowl empty. Once bitten twice shy and many of the people who bare the scars of having dealt with unethical estate agents will not be returning for some time.

ESTATE AGENTS LOSING OUT ALL ROUND

Many estate agents made additional income through property management but many will now find that the landlords are now trying to offload their properties. You only have to look at the number of flats and houses for sale with vacant possession to realise the extent of the problem.

Those that also provided mortgage services will obviously have found that this source of income has also dried up. The reality is, just about every which way that estate agents generated income has now gone west for the foreseeable future.

The more established estate agents, those that have seen the good and bad times before and who have a far stronger financial basis will be rubbing their hands with glee. They know that they can wait out the property crash and come through the other side and have far less competition to deal with.

You see, every cloud has a silver lining.