Who’d be an estate agent? People who rent and sell properties are tightening their belts and fastening their seatbelts for a bumpy ride.
The number of mortgages approved in the UK has fallen dramatically in recent months, making life increasingly hard for the people who rent and sell properties – the estate agents. And many experts are predicting tougher times ahead for those who rent and sell.
It will be hard for many people to find sympathy for the rent-and-sell industry. Estate agents are regularly ranked with traffic wardens and politicians in the most unloved part of Britain's workforce.
But by most accounts, estate agents will need all the deviousness and chicanery the characters used on ITV's recent comedy drama Sold! to rent and sell property in 2007.
"Credit crunch" hits rent-and-sell industry
The biggest problem may be the "credit crunch". Banks have helped fuel the last ten years' property rises by lending a lot of money to people who might not have been able to pay it back – and, starting last in the USA last spring, people who actually haven't been paying it back.
As a result, the banks have stopped lending as much money to people they think may be a credit risk. People with less-than-excellent credit histories might find they can rent and sell their house, but won't be able to get a mortgage to buy a new one – which means fewer buyers in the market for agents to rent and sell to.
Knock-on effects on renting and selling
The knock-on effect is that people who might be looking to sell a house might decide to sit tight for a year or so until the effects of the crunch have played out. And that will mean fewer houses coming to the market for the agents to rent and sell, which means less business.
A further knock-on of the credit crunch – because companies as well as people are being affected – may be a rise in unemployment. And that, too, will affect house prices and the amounts they rent and sell for – something that could see many estate agents joining the dole queues themselves.
Rent and sell slowdown noted
The slowdown in both rent and sell markets has been noted on satirical blog website Agents Diary, which records the (apparently honest) thoughts of an estate agent. In one recent post, he is confronted by a banker who says:
"‘Tough times ahead for you I hear,' [the banker says] with a grin bordering on gloating. ‘Not really,' I lie defensively."
"‘Not shutting any offices then?' he asks with head on one side. I'm briefly tempted to make some crack about drinking in a wine bar that used to be one of his branch offices. Particularly because with property industry turnover likely to be noticeably down it doesn't take a … banker to work out there's problems ahead, only I might need him one day for a new business start up loan…"
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