Estate agents Countrywide and LSL in merger talks

Estate agents Countrywide and LSL are in talks to create the UK’s biggest property group

Estate agents Countrywide and LSL are in merger talks to create “the UK’s biggest property group”, reports Sarah Provan in the Financial Times. If the all-share deal goes ahead it would bring together LSL brands such as Your Move and Marsh & Parsons with Countrywide’s Hamptons International and Gascoigne-Pees to create a group worth about £500m with 14,000 employees. 

The hope is that the tie-up will allow both firms to eliminate costs by having one head office and combining IT systems, says Julia Kollewe in The Guardian. There are also likely to be “scores of branch closures and job losses”, since both firms are struggling. Countrywide is doing particularly badly and has seen its market capitalisation fall from £750m when it floated in 2013 to around £111m today as it has “struggled with mounting losses and a heavy debt burden”. Indeed, Countrywide’s founder Harry Hill recently said that the business is “beyond salvation”.

It is “little wonder”, then, that Countrywide and LSL are “seeking strength in numbers”, says Vinjeru Mkandawire in The Daily Telegraph. After all, “cooling sales, sharp cuts to letting fees”, changes to stamp duty and the uncertainty related to Brexit is creating a “turbulent time” for the sector. 

Worst of all, new technology such as artificial intelligence has given the “commercial edge” to online-only brands such as Purplebricks, Zoopla and Rightmove. Nonetheless, online agents still only account for a “small slice” of the sector, so traditional agencies are likely to “remain relevant” for some time. 

Recommended

Short squeeze
Glossary

Short squeeze

When a large number of short sellers target the same stock, the price can rise in a self-perpetuating circle known as a 'short squeeze'.
6 Dec 2021
Cost/income ratio
Glossary

Cost/income ratio

The cost-to-income ratio is a key financial measure, particularly important in valuing banks...
6 Dec 2021
Has the “jam tomorrow” bubble popped already?
Stockmarkets

Has the “jam tomorrow” bubble popped already?

Fund managers have had a good year so far. John Stepek looks at what to expect from markets until year end.
6 Dec 2021
Three stocks that should profit from the dash for digital growth
Share tips

Three stocks that should profit from the dash for digital growth

Professional investor Christopher Versace of the Digital Infrastructure and Connectivity UCITS ETF picks three digital growth stocks to buy now.
6 Dec 2021

Most Popular

Bubbles grow in global property markets as house prices continue to rise
Property

Bubbles grow in global property markets as house prices continue to rise

House prices grew by 6% in the year to mid-2021 in 25 global cities, with the German property market in particular showing signs of overheating.
3 Dec 2021
Investing in time
Sponsored

Investing in time

SPONSORED CONTENT – Watch collecting can be addictive and expensive, but it can also be a very sound investment strategy
3 Dec 2021
Three safe bets on the growing online gambling sector
Share tips

Three safe bets on the growing online gambling sector

Professional investor Aaron Fischer, creator of the Fischer Sports Betting and iGaming ETF, picks three of his favourite online gambling stocks.
29 Nov 2021