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UK property related companies see business fall drastically

Legal conveyancing firm, Fox Hayes, has gone into administration with the loss of 115 jobs. The Yorkshire law firm was mainly focused on the residential property market.

Hammonds Direct, one of the UK's leading Home Information Pack providers is also facing financial problems. Low volumes of work and tight pressure on margins are proving difficult for these kinds of businesses.

'As the credit crunch continues, we are likely to see further casualties from the HIP provider sector,' said Ashley King, managing director of Simply HIP.

The number of companies offering support and advice to those buying real estate expanded massively between 2000 and 2007 as investors, retirees and would-be vacation home owners snapped up houses and apartments across the globe.

Now they are having to cut back as the volume of work decreases sharply and in some cases just disappears. 'What we've seen is a bloodbath,' said John Howell, senior partner at the London-based International Law Partnership, describing the decline in international sales.

At his firm, which provides legal and financial advice to people buying foreign homes, real estate-related enquiries have fallen to between 50 and 60 a week, down from 250 a week in 2006 and 2007. Property business has halved since last August, just before the financial crisis hit, he said.

The firm expects to lay off two or three of its more than 20 property lawyers soon, and has already moved five of them to real estate litigation. That sector has boomed as deals and developments gone bad give rise to lawsuits, but the increase has not been enough to make up for lost sales work.

Things are even worse for British-based Villapac, which for the last five years has been selling all-inclusive furniture packages for property owners in Spain, Portugal and Morocco. 'It's brutal, disastrous. We're fighting every day to keep the business alive,' said Mark Wilman, the company's owner.

Villapac has laid off 75 of its 100 workers in four waves of cutbacks since August and has closed showrooms. Earnings in January were around £100,000 compared with £650,000 in January 2008. New customers are hard to find and many of those who paid deposits are trying to back out as they cancel or postpone pending property purchases.

Simon Conn, of the UK based Conti Financial, which connects buyers with overseas mortgages said that business is down about 40% from a year ago. New inquiries are those who want to refinance homes rather than from new buyers.

Simon Greenwood, whose company, A Life in Puglia, helps English speakers find and buy homes has seen business drop by almost a third.