The Gazette 1988

DECEMBER 1988

GAZETTE

C O M P A NY S E C R E T A R I AL C O N S U L T A NT

Out of London MULTIPLE ADVANCE John Matthews B.A. (Law), Solicitor

PETER H. QUINLAN

The change in character amongst the estate agents in my area has been quite startling. Until 1986, there was a range of independent agencies of all sizes, some very long established, others quite recent in origin. Towards the end of 1986, one of the newer firms w i th a marked aggressive quality in its sales policy and w i th a large number of branch offices, was acquired by a national firm of estate agents. In January 1987 the Prudential Assurance Co. acquired the largest firm of estate agents (established in 1786). Even the old firm name was dropped. As a consequence, t wo other firms next in size and b o t h long es t ab l i shed, amal- gamated and promoted a definite image including the word 'Home- shop' in their sales literature. The amalgamated firm, however, was acquired in January 1988 by the Nationwide Anglia Building Society. At the same time another medium sized firm was taken over by the Abbey National Building Society. Whilst the firm names in these t wo examples have been r e t a i ned, t he name of t he respective building society is given as much prominence. Yet another agency, largely specialist in its c l i en t e l e, sp l it in t w o ; t he ag r i c u l t u r al part r ema i n i ng independent, the residential sales part acquired by t he General Accident Group. The end result of all this is quite bizarre. A sole p r a c t i t i one r, u n q u a l i f i ed ex cept by his experience, now finds himself w i th three far flung small offices, the largest independent in the area. There has already been a large increase in work for independent surveyors for the other building s o c i e t i es do not w a n t t he ir mortgage surveys conducted by agencies controlled by one of their rivals. There are merits in remaining independent as the small agents are now finding. Clients who want independent advice without feeling

they have to contribute to national profit margins, will remain faithful to the independent agency. There are even repercussions within the new mu l t i p l e s. Some f o rmer partners, now local directors, have resigned or been retired. The remaining local directors are finding they have to measure up to profit margins set down by people in London w i th no idea of local conditions. The upshot is that some of those local directors, pa r t i c u l a r ly t ho se w ho are surveyors, may leave their present situations and set up on their own as independents once more. How does the local law society view what has happened to the major estate agents? Is there a chill of fear that the same acquisition process will affect solicitors' firms if the statutory restraints are removed? Is there the fear that the multiples will add conveyancing to their services and be able to undercut conveyancing charges of solicitors by making conveyancing a loss leader? So far the local law society is adopting an optimistic approach, believing that the new multiples will not provide a sufficiently skilled service, if they attempt conveyanc- ing at all. A 'wait and see' attitude has been a d o p t ed t owa r ds t he possibility of solicitors selling property. The experience of a small solicitor estate agency so far is not very encouraging. So far, solicitors have held back not wishing to incur the wr a th of estate agents. Now that these are mostly controlled by multiples, this restraint has been removed. The writer remains at present un- convinced that solicitors should venture into property sales, a field in which they have no expertise at all. It is little use competing w i th estate agents, if the competition provided is not expert. The writer believes that the quality of independence is still one to be prized even today. It is even more important in times when

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control of sales of land is rapidly becoming vested in the hands of a few remote corporations.

Reprinted f rom the "Out of London" column in the Solicitors Journal, vol 132, Issue 22, 3 June, 1988, w i t h k i nd permission.

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