The study specifically pinpointed both the property and financial services sectors as being in particular difficulties.
It found a 16 per cent jump in the number of firms involved in the buying, selling and letting of homes which were classed as being in this level of distress, while there was a five per cent jump in the number of financial service firms in financial trouble.
According to Begbies Traynor, this has largely been down to the uncertainty due to Brexit, with the suggestion that once a final decision has been agreed “then stability should return as the fundamentals of this sector remain reasonably good”.
However, brokers have suggested that intermediaries can continue to thrive so long as they adapt to changing technology and ensure they market their services properly.
Offering a service that’s needed and appreciated
Paul Flavin, director at Zing Mortgages, noted that in his area the usual post-Summer bounce last year did not materialise, to the point that he expects some local estate agents without a strong lettings arm to be in dire straights.
He noted that this had an obvious knock on effect for intermediaries, and suggested that brokers need to raise their game and avoid relying on procuration fees from product transfers if they are to stay in business.
Zing said: “Businesses now need to be extremely savvy and astute, forward thinking and willing to embrace change just to ensure they’re around in the near future to fight for a piece of the pie that is currently taken for granted.
“A broker’s job at present is to ease the pain for the client, but as the application process becomes more streamlined we need to offer a service that’s required and appreciated to ensure we survive.”
The pie has got smaller
Adam Hosker, founder of Bespoke Finance, said that with property transactions struggling and estate agent stock so low, “there have to be some firms hurting as the pie gets smaller”.
He added that while sensible firms will want to have a rainy day fund, and seek to scale with market demands, the reality is that brokers are “at the whim of the housing market” and need to “adapt to survive”.
“Procuration fees haven’t risen with inflation and in our competitive market broker fees are squeezed. A brokerage needs good expenditure discipline,” he concluded.
Get your message right
Andy Wilson, director of Andy Wilson Financial Services, said his firm had enjoyed its best ever year last year, with 2019 off to a positive start thanks to a jump in new enquiries.
However, he said there had been signs of local property firms struggling, noting that a host of traditional estate agents had closed or merged in order to stay afloat.
Wilson argued that for brokers to prosper, it was vital that they marketed their services properly, to ensure that their messaging was getting through to the right potential customers.
“This doesn’t have to be advertising in the traditional sense, but having the right referral partnerships. And social media too, if you’re switched onto that and fundamentally sound then you’ll do well,” he added.