The owner of two large estate agency brands has said that the industry faces extra costs and lower revenues amid falling transactions.

The Nottingham building society has reported a fall in profits last year from £13.6m to £10m after a “planned contraction” of its balance sheet.

Chief executive David Marlow said that it had reviewed its estate agency businesses – which trade under its own brand, and Harrison Murray which it acquired seven years ago.

He said that the market has changed in the past couple of years and these changes will continue in the years ahead.

He said: “We have benefited overall as a society from the expansion of building society services to branches facilitated by the acquisition of Harrison Murray.

“But the estate agency market has undertaken material structural changes over the past 2-3 years in terms of the UK average annual transaction numbers, in the level of fees that agents are likely to be able to accrue from these transactions and in extra costs arising from new additional regulatory requirements.

“We have, therefore, deemed it prudent to write off the goodwill that sits on our balance sheet in relation to the historic acquisition of the estate agency.”

Goodwill is usually written off if the owner thinks it is does not represent anything. On acquisition, goodwill is the premium paid for a company over its book value.

In this case, the Nottingham has confirmed it wrote off £4m.

The Nottingham bought Harrison Murray, which then had 18 branches, in 2013.

Last year it announced it would be closing three of the four branches in Northampton, affecting 41 jobs.

There are currently 15 branches of Harrison Murray in Cambridgeshire, Leicestershire and Hertfordshire, plus 47 Nottinghamshire Estate Agency brand offices.