How Are Estate Agents Fairing in the Brexit Limbo?
Britain’s Brexit blues show no signs of abating in the near future at least. In the meantime, businesses and entire industries across the UK are suffering. One example of which being the estate agency sector, which is in the midst of one of the most turbulent periods ever encountered.
If we had any idea what was going to happen even six months from now, we’d be able to plan ahead. As it stands, nobody knows if, when or how the UK will ever leave the EU. And it’s precisely this uncertainty that’s making it difficult for industries like these to get by.
How Will Brexit Affect Estate Agencies?
Whatever takes place (or doesn’t) on or before October 31 will have a significant impact on the UK property market. If the outcome is amicable, we could be looking at healthy and on-going property price hikes in key markets nationwide. If things take a turn for the worst, it could cripple the entire UK economy.
As a result, it’s hardly surprising would-be movers and investors are, for the most part at least, sitting tight and waiting to see what happens. Enormous decisions are being delayed indefinitely, which is having a knock-on effect on the estate agency sector.
Nobody wants to base their decisions on pure guesswork alone, which means nobody’s buying. And when nobody’s buying, estate agents struggle to stay afloat. The longer the uncertainty drags on, the more challenging it’s going to become for estate agents to survive.
Estate Agents and Brexit Uncertainty
There’s a growing trend among UK estate agent right now to avoid filling the vacancies left by departing agents and representatives. At the time of the EU referendum, it was estimated that the UK estate agency sector was already overpopulated by approximately 20%. That being, 20% more agents needed to cover the requirements of the market at the time.
Today, there’s an even bigger deficit in demand due to the lingering uncertainty of Brexit. To such an extent that some have gone so far as to predict that as many as 2,500 estate agency branches will close their doors permanently over the next 18 months.
Brexit’s eventual outcome could have a significant impact on this tally in either direction, but it still makes for pretty grim reading.
Focusing on specific agencies, a recent report published over at Motley Fool suggested that property powerhouse Purplebricks could completely run out of money, if it doesn’t carefully reconsider its international expansion plans. Two weeks after being bought out of administration, House Network ceased trading entirely.
Despite having some of the best real estate agents in Britain, Countrywide posted total losses of £218 million last year, while suggesting the company plans to close a total of 267 branches.
Across the board, economists believe that the latest wave of low-cost, often web-based real estate agencies will have no choice but to significantly increase their fees to get by. The problem is that this will somewhat augment the appeal of working with a dynamic digital agency in the first place, rather than taking your business to a traditional real estate agency.
In Search of Certainty
While the bewildering Brexit battle continues, issues like these are only set to intensify for many major sectors across the UK. Even if the UK’s departure from the EU turned out to be disastrous, estate agents would at least be in a position where they can make decisive choices and plan for the future.
The way things stand right now, nobody even knows what they’re planning for.