The UK’s high street sales and letting agents suffered almost 5,000 branch closures in 2023, as many agency brands disappeared or merged amid challenging economic conditions, while self-employed agents continue to gain momentum.
New data just released by TwentyEA, part of the TwentyCi Group, reveals that a total of 2,893 estate agent sales branches closed in 2023 with an additional 1,906 lettings branches ceasing to operate.
The findings, part of TwentyCi’s latest Property and HomeMover Report, shows that many of the closures were offset by new branch openings throughout the year but by the end of 2023, there were still 1,154 fewer sales branches and 659 fewer lettings branches.
In Q4 2023, there were 15,401 active sales branches in the UK and 14,544 active lettings branches.
Katy Billany, Executive Director of TwentyEA, part of the TwentyCi Group said: “Last year was the first time since the pandemic that the industry experienced such a significant increase in branch closures.
“On the whole, the closures are largely related to the general uncertainty surrounding the property market and the wider economy throughout 2023. Fewer properties have been sold and fewer tenancies agreed due to the shortage of lettings stock.
“However, there are two more factors at play. Firstly, brands that had the highest volume of net closures were overrepresented by franchise businesses. For example, six out of the top ten sales estate agent brands with the highest net closure rates all had franchise elements to their businesses.
“It is also perhaps not a coincidence that the closures overlap with the rise of self-employed agents, who collectively saw their market share increase by 16% throughout 2023.”
The study also shows that the growth of the self-employed agent continues to gain momentum and accounted for nearly 13% of all new instructions in Q4 2023 within the online and hybrid agent category.
TwentyEA defines self-employed agents as those without a physical branch, usually working under an umbrella brand such as eXp, Keller Williams or iAD.
They define their own operating patch and multiple agents may work under the same brand in the same area. A percentage of their earnings goes to Head Office, but they are fully responsible for how they run their businesses. These agents operate similarly to the likes of a Purplebricks agent, although in Purplebricks’ case an agent’s territories are fixed.
The market share of all online/hybrid agents at the end of 2023 for Exchanges was 5.5%, declining from 6.9% in Q4 2022. This figure continues to trend lower since a high of 8.2% in 2019. The largest agents in this category are Yopa, Purplebricks and eXp, representing over 70% of all activity.
Billany added: “With a slowing property market and squeezed wallets, you might assume that sellers would opt for the most cost-effective estate agent fee, but this wasn’t the case.
“Instead, we saw cautious buyers embrace the expertise of traditional estate agents during such a turbulent economy, and thus market share for online/hybrid agents fell.”
You can download the report here.