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Executive Summary

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EXECUTIVE SUMMARY

In examining the UK estate agents industry, this report concentrates mainly on High Street residential agencies. Consequently, the activities of property companies, auctioneers, surveyors, valuers and property consultants are excluded. The main focus is on housebuying, rather than letting and renting, although some mention is made of these activities.
Key Note estimates that the number of property market transactions in England and Wales will have fallen to around 1.33 million by the end of 1998. While this is 7.6 percent lower than the 1.44 million transactions recorded in 1997, it is still the second highest level since 1990. Key Note estimates that estate agents' total revenue will be just over £3bn in 1998, up from £2.9bn in 1997.
The UK property market has been declining since the spring 1998, with some agencies experiencing falling sales even earlier. Prices rose gradually in the first 3 months of 1998, becoming steady in the summer, before falling by 0.1 percent in August. Consequently, 1998 will prove to be a disappointing year, especially since a number of agencies reported their first substantial profits for the 1990s in 1997. The stronger profits of 1997 now look to have been a blip in what is becoming a much more difficult market.
Factors affecting the market have included a slowdown in UK economic activity and a reduction in the number of overseas buyers. Further fears concern the future of the world economy and the knock-on effects it may have on interest rates, job prospects and company profits in the UK.
Key Note estimates that there are a total 12,400 estate agency offices in 1998, which is 50 more than there were in 1997. The boom in activity in 1997 persuaded more people to enter this already overcrowded market. However, in the long-term, the number of agencies is likely to decrease. Competition from other professions and from Internet-based agents will increase and more people will start to sell directly via the Internet.
Practices in the industry are now subject to widespread review by the Government and a list of proposals regarding conveyancing, gazumping, surveying and housebuying chains is due to be published during 1999.
Key Note predicts that 1999 will be a difficult year for estate agents. It is unlikely that the market will pick up significantly before 2001. Key Note estimates that both the number of transactions and revenue will continue to increase, reaching 1.48 million and £4.3bn respectively by 2003. However, the number of offices will fall slowly each year, to 12,050 by 2003.

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TABLE OF CONTENTS

Executive Summary

Market Definition

INTRODUCTION

MARKET SECTORS

MARKET TRENDS

Table 1: Estimated Number of Estate Agency OfficesÅ, 1991-1998

Table 2: Estimated Breakdown of Average Estate Agency Revenue ( percent), 1998

Table 3: Breakdown of the Types of Agreement Offered by Estate Agents, 1998

Table 4: Index of UK House Prices at Current Prices (index 1983=100), 1990-1998

Table 5: Seasonality of Estate Agency Business in England and Wales (000 transactions), 1997

Market Size

THE TOTAL MARKET

THE NEW HOUSING MARKET

REGIONAL HOUSE PRICES

Table 6: Property Market Transactions in England and Wales (million transactions), 1990-1998

Table 7: Estimated Total Estate Agency Revenue in England and Wales (£m), 1998

Table 8: Average UK House PricesÅ by Region (£), January to March 1997 and 1998

Industry Background

RECENT HISTORY

INDUSTRY CONCENTRATION

FRANCHISES

ESTATE AGENCY NETWORKS

PROFITABILITY

TRADE ASSOCIATIONS

Competitor Analysis

THE MARKETPLACE

MARKET LEADERS

ADVERTISING AND PROMOTION

Table 9: The Leading 30 Residential Estate Agencies (number of branches), December 1996 and 1997

Table 10: Main Media Advertising Expenditure by Estate Agents (£000), Year Ending March 1998

Strengths, Weaknesses, Opportunities and Threats (SWOT)

STRENGTHS

WEAKNESSES

OPPORTUNITIES

THREATS

Buying Behaviour

HOME OWNERSHIP

HOUSEBUYING TRENDS

PREFERENCES

Table 11: Home Ownership in the UK ( percent of adults), 1997

Table 12: Length of Time in Present Home ( percent of adults), 1997

Table 13: Incidence of Home Buyers Remaining in their Local AreaÅ by Region ( percent of buyers), 1998

Table 14: percentage of First-Time Buyers by Region ( percent of buyers), 1998

Table 15: percentage of Buyers Who are Not First-Time Buyers But Who Have No Property to Sell by Region ( percent of buyers), 1998

Table 16: Buyers Who are Not Involved in a Buying Chain by Region ( percent of total buyers), 1998

Outside Suppliers to the Industry

SALE BOARDS

PHOTOGRAPHIC SERVICES

IT EQUIPMENT

PRINTING AND GRAPHICS

SOLICITORS

SURVEYORS

MORTGAGE FINANCE INSTITUTIONS

INSURANCE COMPANIES

Current Issues

THE STATE OF THE MARKET

VIEWS FROM THE HIGH STREET

COMPANY RESULTS

MERGERS AND ACQUISITIONS

CORPORATE REBRANDING

THE EXPANSION OF TEAM

THE GROWING OMBUDSMAN

AWARDS

Forecasts

FORECASTS 1999 TO 2003

LETTINGS

INTERNET TRADING

REFORMING THE PROPERTY-BUYING PROCESS

Table 17: Forecast Property Market Transactions in England and Wales (million transactions), 1999-2003

Table 18: Forecast Estate Agents' Revenue in England and Wales (£bn), 1999-2003

Table 19: Forecast Number of Estate Agency OfficesÅ 1999-2003

Company Profiles

INTRODUCTION

DEFINITIONS

FURTHER INFORMATION

Further Sources

ASSOCIATIONS

PERIODICALS

DIRECTORIES

GENERAL SOURCES

HBI UK INFORMATION SOURCES

GOVERNMENT PUBLICATIONS

OTHER SOURCES

Text © 1998 Key Note

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