One of the main reasons is a long-term decline in property sales. Between 2014 and 2017 the number of transactions in London dropped by 20%, while sales across the UK have fallen by 1% in the past year.
The number of estate agents in difficulty has risen sharply from last year, when just under 5,000 were found to be in trouble.
Another reason why insolvencies of High Street estate agents are increasing is online competitors continue to chip away at their sales and undermine commission rates.
Future plans to ban letting fees to tenants - expected to come in early next year - could dent profits even more.
The Hitchin office earlier this year assisted a London based estate agency in securing the sale of the lettings business to save jobs and free up cash for unsecured creditors. A part of the restructuring process was a payment plan negotiated with HMRC repaying a spiralling PAYE/NIC, CT and VAT debt.
If you know of an estate agent or any related business that is struggling, BRI’s team of experts can assist in looking at the financial distress and finding solutions to deal with the difficulties faced.