Introduction
Despite the credit crunch that hit the United Kingdom five years ago, real estate companies continue to expand, not only in terms of revenues but also of the scope of their operations. Prices for their stocks cost more than ten times the earnings; investors predict an upward trend in the years to come. Nevertheless, this does not mean good news to the consumer group. A significant part of the population is still faced with issues concerning the high cost of residential property. First-time buyers for instance, are forced to settle with renting because they are not able to afford new homes (Barnato 2013). This paper covers four of the most popular real estate companies in the UK—their current profile, main operations, and strategies used to survive the competition. This paper will also examine the crises affecting the real estate industry today, and what the government is doing to help the people particularly those that belong to the low-income group.
Literature Review
When looking for property to buy or rent, consumers usually get help from realtors who either work independently or for real estate agencies. The continuous surge of the property market gave rise to hundreds of real estate firms offering not only to facilitate interactions between property buyers and sellers, but also to allow efficient property management by the investors.
Countrywide
Countrywide was founded in 1986. Through acquisitions, the company turned into one of the largest estate agency and property management providers in the United Kingdom. Headed by Chief Executive Officer Grenville Turner, Countrywide is now consists of approximately 1300 letting and estate offices, and employs more than 10,000 mortgage consultants, surveyors, and agents (Countrywide.co.uk 2013). It operates nationwide through 46 local high streets, with brands such as Hamptons, Bairstow Eves, and Blundells (Wilmot 2013). Countrywide regained momentum in 2013 following its demerger from Hambros plc in 1998 and Apollo Management in 2007. It now offers a full range of agency services, and trading at 29 times earnings.
LSL Property Services
What makes Property Services distinct from the most leading providers of residential property service in the United Kingdom is that focuses on lower class consumers (Wilmot 2013). They offer a wide range of services which include residential sales, lettings, surveying, mortgage and non-investment insurance counseling. They also handle valuations and panel management, asset management, and property management for mortgage lenders. All these transactions are carried out through the following brands: Your Move, Reeds Rains, Marsh & Parsons, Intercounty, Frosts, JNP, Goodfellows, and Davis Tate and Lauristons (LSLps.co.uk 2013). Acquiring Halifax Estate Agency (HEA) in January 2010, LSL Property Services presently have more than 500 branches and letting agencies nationwide. The company reported a profit of £35.1 million in 2012 (Wilmot, 2013).
Savills
Listed on the London Stock Exchange, Savills is one of the largest real estate companies in the world (Wilmot 2013). In terms of turnover, Savills is number one in the UK, and number four in Europe. Savills has a network of 500 offices and associates across the United States, Europe, Asia Pacific, Africa, and the Middle East. Targeting the top end of the market that is not dependent on government support (Wilmot 2013), Savills offers a wide array of investment, sales, leasing, research and consultancy, and property management services to clients all over the world. As of March 2010, the company has approximately 3000 employees in the UK and 20,000 people globally (Savills.co.uk 2013). Savills was established in London in 1855 by Alfred Savill.
Connells Group
With headquarters in Leighton Buzzard, Connells Group is among the top estate agency and property service companies in the UK, with a mission to help customers buy residential property of their own (Connels.co.uk 2013). They also act on behalf of the top 20 UK developers and local house builders. Their services include residential sales, mortgage services, and property management. Connells Group has a network of around 150 branches nationwide. They have sold more than £2.3 billion worth of property, and arranged mortgage loans totaling to about £500 million. They markets more than 2,500 new homes in more than 150 real estate websites. Connells Group is a subsidiary of Skipton Building Society, with its first branch launched in Luton in 1936.
Discussion
The real estate is one of the biggest casualties of the global recession (Department for Communities and Local Government 2013). According to Barnato (2013) in an article in CNBC, the number of homes for sale is decreasing; experts blame it on excessive demand by consumers and on the failure of the government to implement effective policies on housing. She stressed that while residential property sales went up by 8.2 percent in May, supply only grew by 2.8 percent. Property owners feel reluctant about selling which also accounts for the lack of available houses to move to. Other contributing factors are lack of employment opportunities and high cost of moving.
As per the Department for Communities and Local Government (DCLG) only 115,000 homes were completed in the UK from 2009 and 2010. These consist of homes targeted for the low-income group, and those built by the private developers. Construction of social housing has slowed, hence the population dependent on government support remains unable to have their own homes. In addition, while the residential property in itself is not easily affordable, most homes available through real estate agencies are only applicable for the well-to-do families.
The Department for Communities and Local Government is not oblivious of the present situation in the real estate market. In fact, they have outlined a three-point scheme to support undertakings of concerned entities and at the same time enable the low-income earners to buy their own homes. They removed unnecessarily complex regulations in real estate, offered to finance housing projects by the private sectors, and helped buyers get approved of their mortgage petitions. Their projects include the £570 million Get Britain Building fund for developers and the Build to Rent fund for investors seeking to put up homes for rent. Savills predicted a 1% increase in economic output by this incentive.
Conclusion
The top four real estate agency companies in the United Kingdom are working to streamline selling, acquisition, and management of properties. Their success is inevitable on account of the growing demand for new homes and of the advances in technology. However that demand is not sufficiently addressed due to the high cost of real estate and the inadequacy of social housing. The government is actively designing solutions to enable the low-income population to have their own homes.
References
Barnato K, 27 May 2013. UK property price rises stoke fears of new bubble. CNBC [online] Available at: <http://www.cnbc.com/id/100767948> [Accessed 5 August 2013].
Connells, 2013. About us. [online] Connells. Available at: <http://www.connells.co.uk/about-connells/> [Accessed 5 August 2013).
Countrywide, 2013. About us. [online] Countrywide. Available at: <http://www.countrywide.co.uk/> [Accessed 5 August 2013].
LSL Property Services plc. About us. [online] LSL Property Services plc. Available at: <http://www.lslps.co.uk/about> [Accessed 5 August 2013).
Savills plc 2013. About us. [online] Savills. Available at: <http://www.savills.co.uk/> [Accessed 5 August 2013).
Wilmot S, 2013. It could help to buy an estate agent. [online] Investors Chronicle. Available at: <http://www.investorschronicle.co.uk/2013/07/24/shares/sectors/it-could-help-to-buy-an-estate-agent-2vYNZNtqV0Tbe56WrPlWlN/article.html> [Accessed 5 August 2013).
