Traditional Estate Agents Struggle Amidst Growing Online Competition and Upcoming Fee Ban
- 153 estate agents went insolvent in the last year, up from 148 the previous year
- Online estate agencies like Hatched, Rightmove, and Zoopla are squeezing high street rivals
- Traditional estate agents face higher costs compared to online services
- Market share for online estate agents rose to 6.06% in Q4 2017
- Countrywide’s shares fell 25% after a profit warning
- Government plans to ban letting fees could further impact profits
- Chancellor Philip Hammond announced the ban in Autumn Statement 2016, expected in spring 2019
Around 153 estate agents have gone insolvent in the last year, up from 148 the previous year. The online estate agency market continues to grow, with firms like Hatched, Rightmove, and Zoopa squeezing high street rivals due to their lower commission rates. According to data company TwentyCi, online estate agents’ market share rose to 6.06% in Q4 2017, an increase of almost 61%. Traditional estate agents face higher staff and property costs, making it difficult to compete with online services. Countrywide’s shares fell 25% after issuing a profit warning in June. The UK government plans to ban letting fees charged to tenants, which could further narrow profit margins. Chancellor Philip Hammond announced the ban in Autumn Statement 2016 and expects it to pass in spring 2019. Chris Marsden, restructuring partner at Moore Stephens, said traditional estate agents may need to reduce overheads and review their service offerings to compete.
Factuality Level: 8
Factuality Justification: The article provides accurate information from reliable sources such as Moore Stephens and TwentyCi, and presents a clear and coherent argument about the challenges faced by traditional estate agents due to the growth of online competitors and government policies. It also includes expert opinions on potential solutions for these businesses.
Noise Level: 3
Noise Justification: The article provides relevant information about the decline of high street estate agents due to competition from online services and government plans that could further affect their profitability. It also offers insights into potential solutions for traditional estate agents to adapt to the changing market.
Financial Relevance: Yes
Financial Markets Impacted: High street estate agents, online estate agencies like Hatched, Rightmove, Yopa and Zoopla, Foxtons, Countrywide, and the UK government’s plans to ban letting fees impacting estate agent businesses
Financial Rating Justification: The article discusses the financial struggles of traditional estate agents due to competition from online services and potential changes in government policies, which affects their revenue and profitability.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Extreme Rating Justification: There is no extreme event mentioned in the article.
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