A property mergers and acquisitions specialist has predicted a busy year for agency takeovers.

Laura Cooper, acquisitions director at Atomic Consultancy, said activity was high last year, and she expects the strong market performance to continue in 2024.

“We’re seeing the same factors which influenced activity in 2023 continue, along with some additional aspects which are driving activity even further,” she said.

Cooper highlighted three areas in particular:

• Large portfolio exits: owners of businesses with four-plus offices and £3m-plus in lettings turnover “may look to capitalise on valuations in some key areas, worried they may miss the peak of the market if they delay their decision”.
• Election anxiety: as the potential for increased taxes looms, some owners “may choose to sell before changes take effect, further driving deals in the short term”.
• Rise of self-employed agents: the trend towards self-employed estate agents building their own lettings portfolios is “creating new acquisition targets at an accelerated pace”.

Last year saw shifting motivations for agency owners selling up, according to Atomic. while retirement was the primary driver in past years, 2023 saw a rise in owners selling due to:

• recruitment challenges which were pulling them back into hands-on operations
• cost increases which were impacting profitability
• escalating legislative requirements, particularly in Wales
• pre-empting potential tax changes in the imminent general election
• refocusing their business on sales operations and capitalising on high lettings values.

Lucy Noonan, founder and CEO of Atomic Consultancy, commented: “With all the moving pieces, navigating the acquisition landscape can be complex. The consistent message we hear is the immense value of seeking expert advice before making any decisions.”