Estate agents are three a penny
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Your support makes all the difference.NATIONWIDE Building Society has sold its network of 300 estate agents for pounds 1 - valuing its branches around the country at just three for a penny. The deal, announced yesterday, brings to an end the costly and ill-judged attempt by building societies to diversify into selling houses, rather than just financing their purchase.
Apart from the Halifax, all the big building societies which bought up estate agency chains at the height of the housing boom in the 1980s are retreating from the business after incurring combined losses of more than pounds 750m.
Yesterday's sell-off includes more than 650 vehicles and other assets worth pounds 5.2m.
Nationwide has lost pounds 200m on its estate agency business in the past seven years. Yesterday it admitted that the venture had been a costly mistake, losing it almost pounds 14m in the 12 months to March 31 this year. Since 1990, the society's initial tally of 500 branches has been cut to 300.
The buyer is Hambro Countrywide, a rival chain owned by the city merchant bank Hambros, which yesterday also agreed to take over Nationwide's profitable house surveying business for pounds 12m. The deal makes Hambro Countrywide Britain's largest estate agent.
Harry Hill, managing director at Hambro Countrywide, said that no redundancies were planned among the 1,800 Nationwide staff. 'If anything, we are planning to recruit an extra 200 people in order to market financial services products from our life insurance company, Hambro Guardian,' he said.
Brian Davis, Nationwide's chief executive, said: 'The main reason for moving into estate agency in the 1980s was to secure a stream of new mortgage business.
'This has been achieved, albeit within the context of a depressed housing market which has led to disappointing performance in terms of our house sales operations.'
Hambro Countrywide's entire chain of branches, now 750-strong, will refer all mortgage business to Nationwide, allowing the society to expand its lending operation.
In return, Nationwide has agreed to continue to pass on all the surveying business required by its own mortgage customers to Hambro's new division, for 10 years.
The bargain-basement sell- off is only one among many in recent years, following massive losses by several building societies and insurance companies.
Expensive mistake, page 27
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