Estate agents could be next on the high street casualty list, as they grapple with a stagnating housing market and online rivals like Purplebricks moving onto their turf.
According to accountancy KPMG, pressures on High Street agents will come to a head in the second half of the year, piling further pain on town centres already reeling from hundreds of retail store closures.
Blair Nimmo, KPMG’s head of restructuring in the UK, said these firms are facing an unprecedented set of challenges.
Estate agents have come under pressure from online rivals like Purplebricks and Emoov
‘The rise of online-only agencies have combined with falling house prices, a general slowdown in sale activity and a raft of legislative changes, all of which have generated headwinds for your average high street agent.
‘I would therefore not be surprised to see operators across this sector struggle over the second half of the year and beyond.’
London-focused firm Foxtons has come under intense pressure since the Brexit vote, which triggered a considerable slowdown in the capital’s property market.
And Britain’s biggest listed estate agency Countrywide, which counts Hamptons and Bairstow Eves among its brands, is also in full-blown crisis as it seeks to raise emergency funding.
Earlier this month, Countrywide shares lost two-thirds of their value in a single day as the embattled group made a call for emergency funds.
KPMG’s forecast comes as online firms, such as as Purplebricks, Emoov and Tepilo, nibble away at the market share of traditional bricks and mortar firms.
The High Street has been pummelled over the last year by several high profile retail administrations and store closure programmes. Maplin, Toys R Us and Poundworld have all gone bust, while New Look, Carpetright and Mothercare are closing rafts of stores.
The casual dining sector has also come under pressure, with Jamie’s Italian and Byron among firms shutting restaurants.
‘We continue to see companies in the casual dining and retail spaces battle hard in the face of changing consumer attitudes towards spending, coupled with increased costs as a result of the living wage and business rates pressures,’ Nimmo said.
‘Whilst a number of chains have survived through the implementation of successful CVAs or via pre-pack administrations, inevitably there have been site closures and job losses across many parts of the country.’
However, a study by KPMG of notices in the London Gazette shows the total number of companies in England and Wales entering administration during the second quarter of 2018 fell sharply.
A total of 302 firms hit the buffers between April and June 2018, compared with 347 in the previous quarter, a fall of 13 per cent.
Year-on-year, the number was up from 297 administrations during the same period in 2017.
Mr Nimmo added: ‘The latest figures reflect a relatively positive picture for most businesses.’