The housing market has been on a roll for 13 years so a sizeable proportion of estate agency staff have not worked in conditions as difficult as they are now facing, says the Estate Agents Market Report 2008.
As a result, they lack the experience required to survive in such a market, and some of the younger estate agents might well withdraw from the market, concludes the report published by research organisation Research And Markets.
'There are already suggestions that the market as we know it today will not exist in 10 years' time, given the currently dire state of the property market and the opportunities for developments on the Internet,' it also says.
The report examines the UK market for estate agents, focusing on the residential property agencies. It excludes property services such as auctioneers, valuers, estate managers, property companies and property consultants.
Countrywide remains the largest estate agency, followed by Connells Residential, LSL Property Services and Halifax Estate Agency. However Halifax has just announced the closure of 53 of its offices and the downturn means that the industry continues to restructure.
Strutt & Parker has merged with Lane Fox and Foxtons has been sold to a private equity firm. In June 2008, Humberts went into administration but was subsequently acquired by a joint-venture company. Although the firm will remain in business, some closures would seem inevitable.
Regarding closures, it is likely that there will be 2,000 fewer estate agency branches than there were at the beginning of the year, with more likely to close in 2009.
Given the growing power of the internet, many industry observers believe that, when the estate agency industry does recover, it will not resemble the industry of today. 'It is expected that a period of restructuring will result in a smaller market and more people will be selling property without using an estate agent,' the report predicts.
It is forecast that both the number of transactions and estate agency revenue will decline in 2008 and 2009, and the market is not expected to recover until at least 2010.
The latest figures from the Royal Institute of Chartered Surveyors show that its members are currently conducting fewer than five transactions a month.
