1 in 5 estate agents risk going bust

ONE in five estate agents is at risk of going out of business amid a growth in online companies, research shows.

Almost 5,000 are showing signs of ‘financial distress’, said accountancy firm Moore Stephens.

Traditional companies are likely to have higher property and staff costs and are struggling to compete with online competitors, said the report.

Websites such as Rightmove and Zoopla mean buyers can do most of their searching online without visiting all the agents in an area. Meanwhile several agents – such as Emoov, Tepilo and Purplebricks – only operate online, and can charge much lower fees than their traditional rivals as they have so few costs.

Mike Finch of Moore Stephens said: ‘Traditional high street estate agents’ profit margins are being squeezed from both sides, from cut price online competitors, to their larger counterparts on the high street who are forcing them to up their spending or give up the race.’

Last week, Countrywide – the UK’s biggest listed estate agency – revealed its pre-tax profits for the six months to June were £447,000 – down from £24.3million in the same period last year.