If you’re a landlord in the UK at the moment, chances are the letting agency managing your property has changes hands over the past year.

Because the Covid pandemic has prompted one of the most extraordinary outbreaks of merger and acquisition activity within the property industry seen in living memory.

The most recent this morning is the purchase by London estate agency Foxtons of its rival Douglas & Gordon for £14.25m, which followed the acquisition of Home Counties agency Gibbs Gillespie yesterday.

The biggest of all, which is due to complete later this month, is the takeover of property industry behemoth Countrywide and its 60 estate agency brands by rival Connells for £134 million following years of financial problems for Countrywide.

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Other significant deals include the takeover of Hunters by TPFG, the parent company of Martin & Co a few weeks ago, as well as the ongoing buying spree of northern agency Linley & Simpson, which recently bought its rival Dacre Son & Hartley.

Smaller takeovers

And these are just the big names – a flurry of smaller takeover deals has also been under way between local and regional estate agencies too.

But almost all of these deals are about lettings. Following the Tenant Fees Act two years ago, the profit margins of lettings agents have been severely reduced and increasingly the only viable way to run such a business is to amass a large portfolio of rental properties and leverage – as business gurus like to say – their economies of scale, while also putting up their fees to landlords.

1 COMMENT

  1. It was inevitable these amalgamations would occur.
    I’ve been saying it for years.

    Nothing wrong in that as it makes them far more financially resilient.

    A LA I knew well for years advised me that the TFB was going to cost hime over £35000.
    Every office could experience similar losses.

    Certainly LL are refusing to pay referencing costs and only by increasing fees can LA keep afloat.

    Trouble is increasing fees is causing LL to dump LA.

    LA are in an impossible position.
    Most unfair on them actually.

    Other LA are behaving creatively and have managed to replace lost fee income without increasing fees to LL.

    But for LA stuck in old ways they will be out of business soon.
    Any business has to move with the times.
    As LL have found with S24 things change.
    The TFB is the LA version of S25.

    Just makes former business models unviable.

    Govt has shown it’s propensity to move goalposts and introduce retrospective legislation.

    Only Govt can go back in time and undo tax regulations etc.

    The one thing you can be certain of is that there ate NO certainties.

    For me S24 means I have to leave the PRS.
    The figures no longer work for me.

    I DON’T remember many LA supporting the S24 Judicial Review.

    So you can imagine how many LL care what the TFB is doing to LA income!!

    Until the PRS sector comes together to defend it’s collective position Govt will just pick off each section.

    LA should be aware that their business will decline as LL are forced out of business by bonkers Govt regulations.
    And you can bet that the Corporates won’t be using LA.
    They will have their own Tenant sourcing depts.

    LA business will inevitably decline.

    Which is why in recognition of such there will be fewer but larger LA.
    It is now simply about survival.

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