Estate agents are likely to be the next victims of the latest string of High Street closures as demand moves online according to a leading property management firm. DJ Alexander Ltd, one of the UK’s largest family-run property management businesses, has analysed official data and found that almost 2,500 (2,446) estate agency businesses have gone bust in the last five years.
There were 2,181 estate agency failures in England and Wales and 265 in Scotland in the five years since 2013 with the expectation that this trend will continue as the sector suffers from the same High street issues as retailers, casual dining outlets, and others with bricks and mortar exposure. Over the last 18 months these businesses have all succumbed to a combination of high business rates, large rents, and for retailers and estate agents, greater online competition.
David Alexander, managing director of DJ Alexander Ltd, explained: “There are a number of factors in play causing this large number of business failures in the letting and estate agent sector. Clearly online competition has had a dramatic impact on the High Street with its lower cost base and its generational and cultural shift from on street to online shopping. The internet has undercut much of the High Street in the retail and other sectors over the last five years and this is likely to continue.”
“The generational and cultural change is enormous. For most people under 40 the idea of wandering from shop to shop in city centres’ is alien to them and they conduct many of their purchases on their phones, tablets, or computers. This situation is only likely to continue, and we can see that High Street outlets such as estate agents are suffering as a result and will continue to suffer over the next few years. Rents and business rates have also played their part, which is why this downturn is also affecting casual dining, so it is a combination of issues which is causing so many business closures.”