WHILE estate agents are not normally top of many people's party invitation lists, you wouldn't necessarily want them out of a job, but that is the gloomy spectre that many now face.
Estate agents, along with house builders, look set to become the latest casualties of the credit crunch as it tightens its grip on the UK economy.
In a stark reminder of the massive impact of the sub-prime crisis, a report from the respected Centr
e for Economics and Business Research (CEBR) estimates that almost 15,000 working in the estate agency sector will lose their jobs as a result of the housing downturn. This amounts to around 5% of the sector's total workforce.
Jorg Radeke, one of the authors, said: "Although unlikely to be the victims of the credit crunch that will garner the most sympathy, estate agents… are likely to find the next 12 months particularly tough and there will be extensive job cuts."
At the same time, tens of thousands of builders are set to suffer the same fate as the roof falls in on housing construction.
Not surprisingly, house building groups will be forced to take drastic action, and one of the most likely options is a rights issue.
For example, Barratt Developments, with £1bn of debt, has seen its share price plummet amid talk it would have to raise £600m in a discounted rights issue. Taylor Wimpey, with £1bn of debt, is being forced to close regional offices. Other big names including Persimmon may follow suit.
It's hard to see any end in sight for the woes being faced by builders. Lenders are continuing to restrict who they will give mortgages to and many have withdrawn from funding new-build properties altogether because of fears they have been overvalued.
According to Michael Saunders, Citigroup's UK economist: "Housing is in free fall".
One of the most disturbing aspects of this virtual standstill on building sites is the fact there is still a severe housing shortage in the UK and thousands more homes must be built each year to address it. The problem is that potential buyers are nervous about making such a financial commitment in the current economic climate and lenders don't have the liquidity to provide the required mortgages.
British Energy up for grabsEAST Kilbride-based British Energy is a name to watch this week. After much speculation, sources predict the UK Government is on the brink of reaching a deal to sell its 35% stake in the nuclear operator.
French utility EDF is reported to have made a bid valuing British Energy at around £10.8bn.
Iberdrola, the Spanish owner of ScottishPower, is also thought to be interested in buying the stake, as is German RWE.
It's understood an announcement could be made as early as Thursday when the UK Government hosts a summit on nuclear plants.
No love lost between Darling and King ALISTAIR Darling and Bank of England governor Mervyn King will be having a few heated discussions in the coming weeks.
In a bid to avoid a repeat of the Northern Rock crisis and bring some financial stability back to the UK, the Chancellor wants to introduce City high-fliers to key roles in the Bank. King's deputy, Rachel Lomax, retires this summer and there seems to be a difference of opinion between King and Darling about who should replace her.
King is said to want Charlie Bean, the Bank's chief economist, while it's understood that Darling would rather appoint someone like Paul Tucker, who is in charge of financial stability at the Bank and is well known in the City.
It's unclear who will have the final say, but given the state of the UK economy, especially the banking sector, let's hope it's resolved without too much wrangling.
Darling is probably not King's favourite politician at the moment. The Chancellor has unveiled plans to create a panel of well-known City figures to effectively look over King's shoulder for any more crises looming on the horizon.
Darling's watchwords behind this move are once again "financial stability". But is this all too little too late, and where does it leave the Bank's Monetary Policy Committee and the Financial Services Authority?
Will yet another committee not add a further layer of bureaucracy to financial supervision in the UK and put more egos in place to battle it out on policy decisions?
The full article contains 746 words and appears in Scotland On Sunday newspaper.
