The downturn in the housing market is close to claiming another victim after Humberts, one of the oldest estate agent companies in the UK, was forced to suspend its shares on Friday pending clarification of its “financial condition”.
The news emerged as HBOS, a founding partner of Rightmove, offloaded its stake in the online home sales portal, and comes amid signs of further housing market weakness.
Some 19 in every 20 estate agents reported a fall in prices in April, according to the Royal Institution of Chartered Surveyors, the lowest level since the survey began in 1978.
The plight of the 165-year-old Humberts has attracted the interest of property entrepreneur Vincent Tchenguiz, who already owns about 20 per cent of its shares.
Someone close to the situation said on Friday that the investor is interested in taking full control of the company, which owns some 80 branches nationwide. Mr Tchenguiz owns rival upmarket estate agency chain Chesterton.
This week, Humberts admitted that it may be “difficult or impossible” to satisfy certain key conditions of an equity-raising rescue package. Humberts said it was still investigating a potential restructuring.
The struggle at Humberts will add to wider high street gloom, with national estate agents such as Countrywide, Spicerhaart and LSL already beginning to close branches as the market for new home sales dries up.
Rightmove is as close as any to the struggling estate agency sector because it makes its money from charging estate agents – as well as developers and property owners – to advertise.
This month it told the Financial Times that it saw more than 30 estate agents going out of business every week now because of the downturn in the housing market.
The estate agent sector is not as much affected by the downturn in prices as by the reluctance of many homeowners to sell in this market. Estate agents are reliant on the churn in the market – both when it is on its way up and when it is on its way down down – to generate fees.
HBOS said on Friday that it would sell more than 16m shares in Rightmove for a little less than £60m, almost 13 per cent of the company’s share capital, marking the end of its involvement with the company.
Rightmove has initiated a share buyback programme that will help support its share price, which has dropped 34 per cent over the past year, and it is expected that it will use this as an opportunity to buy more back for cancellation.
HBOS said the sale was the end of a “strategic investment”, and that it was not a sign of any concern about the company.
The decision was met with a mixed reaction from analysts, with one branding Rightmove as on a “highway to hell”, but another supporting the “fundamentals” of the company.