According to new research, when the estate agency industry does recover, it will be dramatically different from the industry today. Given the growing power of the Internet, many industry observers believe that the industry will not bear any resemblance to the one we see today. It is expected that a period of restructuring will result in a smaller market and that more people will be selling property without using an estate agent.

Consumer research for the report reveals that 57.7% of consumers said that they would search the Internet if they wanted to move home. While slightly lower than the 2007 figure (58.4%), this confirms the importance of the Web among potential homebuyers; men and women were equally likely to take such action. Despite this, 81.2% of adults still said they would visit an estate agent’s office if they wanted to move home.

The housing market has been on a roll for 13 years and a sizeable proportion of estate agency staff have not worked in conditions as difficult as those they are now facing. Many may lack the experience required to survive in such a problematical market, and some of the younger estate agents might well withdraw from the marketplace. Given the current dismal state of the property market and the aforementioned opportunities for development on the Internet, there are suggestions that the market as we know it today may not exist in 10 years’ time.

Even before the closures of 2007, voices in the industry were asking how much longer estate agents would need a presence in UK high streets. The onward surge of online estate agents has further highlighted the subject. While rental costs for city-centre agents have risen over the past 5 years and staff costs have not been reduced, the number of people visiting agencies has decreased, as a rising number of buyers communicate by telephone, the Internet or email.

However, the arguments in favour of maintaining a high-street presence in towns and cities include the view that high-street offices strengthen a brand’s image. While buyers and sellers may prefer to conduct their business online, they will remember the agency and the high-street branch when they are doing so. Meanwhile, the property portals are consolidating – with Findaproperty and Primelocation announcing in May 2008 that they would merge, other portals are likely to follow.

By 2012, the industry will look rather different, with fewer estate agents in business and certainly far fewer on the high street.  Estate agents will look to increase their profile on the Internet much more in future.  Property advertising on the Internet rose by around 70% in 2007, and advertising is expected to remain high in 2008.  In general terms, the report forecasts 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.

Related research: Estate Agents – Market Report 2008