House prices have been on the rise due to a restricted supply of sellers on the market, yet despite this, figures show that one in six estate agents have had to cease trading within the last year. Research carried out by The Local Data Company shows that 142 outlets closed their doors in the 12 month period to October 2009, with Leeds, Bristol, Liverpool, London and Glasgow being the areas worst hit.
Big name casualties include Halifax, Bairstow and Savills, whilst a number of independent estate agents also had to shut down due to the effects of the global recession. 89 independents closed for business in total whilst chains of five units or more were worst hit, with 54 outlets shutting down.
“This goes to show that it isn’t just house prices that are being hit by the recession, the shockwaves are reverberating throughout the entire housing industry,”
The developing scandal of misappropriated tenants’ deposits has exposed landlords to millions of pounds of liability.Landlords bear the legal responsibility, even though it is letting agents that have spent, lost or vanished with tenants’ deposits, a London agent has said.
Eric Walker, managing director of Bushells, says there are massive flaws in the tenancy deposit legislation, which leave innocent landlords breaking the law.He believes that all letting agents should submit to regular auditing or pay all clients’ money in to a custodial scheme.
He said: “The real time-bomb is where agents hold the money in their own account and register it with a scheme, then for whatever reason cease to be members of that scheme.“This leaves the landlord with a huge liability in the event that the tenancy is extended or renewed, as the deposit is legally no longer registered.
