Revenue steadily returning as the UK property market improves
London, United Kingdom (PRWEB) May 21, 2013
The UK Real Estate Agencies industry includes all businesses that provide intermediary services in the buying, selling and renting of real estate on a fee or contract basis. Operators who provide advisory or appraisal services in connection with the buying, selling or rental of real estate are also included in the industry. According to IBISWorld industry analyst Andrew Johnson, “the sale of residential property is by far the largest business segment for the entire industry, accounting for almost 60% of all revenue, and as a result, the housing market crash in 2008 had a devastating effect on the industry”. Industry revenue fell by 16.7% in 2008-09, triggering significant falls in the number of industry enterprises and total employment. The five years through 2013-14 have mainly been about the recovery of the industry. Overall, industry revenue is expected to grow at a compound annual rate of 2.3% over the five-year period.
The recovery of the industry has largely been influenced by the recovery in the number of property transactions in the United Kingdom. There has been some growth in property transactions but the annual sales are still far lower than in 2007-08. Funding availability has been a key drag on the recovery as it has affected both the residential and non-residential market. Despite interest rates being reduced to new lows and measures introduced by the new government to get the market moving again, a mixture of low consumer confidence and unwillingness for institutions to lend has kept transactions low. Growth has been driven primarily by top end property and investment from foreign sources, as turmoil in the eurozone has made UK property relatively more attractive. This is particularly the case in the London property market. Growth of 5.0% is forecast for 2013-14, helped by a return to strong growth in the residential housing market.
The rebuilding of the industry is forecast to continue over the five years through 2018-19. Johnson adds, “increasing confidence in the economy and higher levels of lending are expected to help drive the growth”. However, a shortage in the housing supply is likely to continue to weigh on growth in the medium term. A key area of innovation over the five-year period is anticipated to come in the online sphere. Although an increasing share of agents' marketing expenditure is dedicated to online campaigns, there remains a lot of capacity for growth and diversification in this area.
The Real Estate Agencies industry is highly fragmented, with thousands of local and regional players. The four largest operators are estimated to account for just 13.8% of industry revenue, with the remainder being largely generated by smaller operations in local areas. Agencies tend to specialise in their local areas, and the range of services offered by the industry allows service specialisation. The largest company in the industry is Countrywide.
For more information on the Real Estate Agencies industry, including latest industry trends, statistics, analysis and market share information, purchase the full report from IBISWorld, the nation’s largest publisher of industry research.
IBISWorld industry Report Key Topics
Real estate agencies are intermediaries in the buying, selling and renting of real estate on a fee or contract basis. Additional services provided by companies in the industry include advisory activities and appraisal services in connection with buying, selling and renting of real estate, and real estate escrow agent activities.
Key External Drivers
Industry Life Cycle
Products & Markets
Products & Services
Globalisation & Trade
Market Share Concentration
Key Success Factors
Cost Structure Benchmarks
Barriers to Entry
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