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Estate Agency Closures Expected To Rise

Wed, 03 Sep 2008
Online property portal Rightmove has warned of an increase in the number of estate agents going bust as the economic downturn continues to grip the market.

The company, which advertises homes for sale via the internet, made the claim as it unveiled a 63 per cent rise pre-tax profit to £19.8m. Underlying operating profit was up 58 per cent to £20.8m.

Group managing director Ed Williams commented: "The business has continued to grow a long way into the housing market downturn at a time when newspaper property advertising has dropped dramatically."

The company, which advertises homes for sale via the internet, said overall membership to its online property advertising website grew by 5 per cent to 19,301, although membership among estate agents fell by 3 per cent - partly due to companies going out of business .

The same reason was also cited for an 84 per cent fall in retention rates among estate agents .

Rightmove said that despite its difficulties in growing its core estate agency business, where it had a 90 per cent penetration of the market, it was growing its business around the sale of new build houses and lettings .

It added that its service represented a "cost effective" means of advertising for agents increasingly looking to reduce overheads.

However, the property website warned that the market downturn is likely to continue in the near future, resulting in more price reductions over the last months of 2008 and into 2009.
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