Dexters might well buy London rivals KFH if the rumours that reach me are true. Apparently there has been an approach.

Of course, it would make perfect sense for them to do so given their recent track record of expansion by acquisition and especially now that they have a huge private equity war-chest with which to snap up willing sellers. Why else would a deal of that size have been done if it were not to fund some real estate megalomania?

This will be big news when and if it happens. But the wider and even more important point is this…. 2022 is going to see M&A activity in the estate agency sector that will make the 1980’s look like a cake sale.

In recent months we have seen Connells acquire lame ducks Countrywide. Foxtons try to grab kudos with the City and a share price boost (unsuccessfully) by buying Douglas and Gordon at a ridiculous profit multiple. Hunters being consumed by the Property Franchise Group. And, just last week, an actual Northern Powerhouse created with a cross-Pennines handshake between Manning Stainton and Ryder & Dutton.

Lucy Noonan of the acquisitive Lomond Group tells me that she has completed 17 deals already this year and seems set to get many more over the line in the next few months.

Robin Paterson of Catalyst Partners, strategic shareholder in Countrywide and Foxtons and vocal critic of both, is also itching to launch a takeover in the space.

Dexters, Connells, TPFG, Foxtons, Lomond, Dunning, Paterson… will not be the only ones on the prowl currently and by my reckoning there will be plenty more whetted appetites on the demand side but also plenty of willing sellers too – plus oodles of investor cash sloshing around to support some big transactions. A perfect storm for a forthcoming M&A frenzy.

Consider these things… large estate agency businesses benefit from economies of scale – in particular at head office, in middle management costs and at admin level. Expansion also means being able to leverage conveyancing and mortgage relationships to gain big income when expanding and at high margin. This is just one reason to go shopping for opportunities.

Listed estate agency firms need constant growth to satisfy shareholders from share value increases that come from big announcements. Growing organically just doesn’t excite anyone. But the increasing number of businesses backed by private equity such as Dexters and Romans Leaders need an exit for those investors too and an IPO is often such a route. Yet they require ‘added value’ and also an exercise in cost cutting to make a public offering lucrative. Acquiring rivals achieves both of these goals.

But also, the big guys can afford to take a long-term view and will not be so concerned about the short-term cyclical downturns that others may be. Downturns are indeed cyclical, after all.

Importantly though, two things have now happened that will boost the enthusiasm of ‘corporate’ estate agency bosses and their investors.

One, that there is no longer a threat from online estate agents. The rocks on the back of traditional estate agency, concerned about structural threat to the sector, have proven to be an exaggerated weight and thus traditional agency can again be backed with more confidence.

Two, if there’s any change afoot within our industry, it’s a pivot to what I would term ‘individual agents’ whether self-employed or employed – in other words freelancers on bigger commission shares characterised by the likes of Keller Williams, eXp and similar but also now a model that is being heavily adopted by copycats.

It’s my opinion that the ‘individual’ model can and will be replicated by many traditional agencies and that the clever ones will run both approaches alongside each other. There are already big rumours that CBRE and some other big and interesting players are about to throw their hats into this particular ring.

This dual strategy will contribute to the further expansion of traditional brands and enable geographic representation in towns without the need for branches – just as I pitched to Foxtons in 2017 and again in 2018 (they listened eventually). The upshot is that traditional estate agency now holds a lucrative future in its hands, especially at scale, and this will be reflected in M&A activity from here on.

Of course, a deal needs two to tango. As the dust settles on the best 18 months the industry has ever had and with normality imminent, owners of medium sized branch networks will surely willingly discuss a trade sale against a backdrop of rising staff costs, the annoyance of Rightmove’s so far unshakeable portal dominance, impending licensing and the prospect of further knee-jerk rule making by Government.

With investor money so readily available acquirers will be able to (and will have to) bid strongly for the right companies and this combination of ‘the best is now over’ and ‘here’s a massive cheque’ will prove irresistible to 10, 20 and 30-year veteran proprietors and equity holders and those that now wish to turn their lifestyle income into a splash of cash for a long and happy retirement.

So, my belief is that an uptick in willing buyers will meet a similar upsurge in willing sellers. AKA: Rocket Fuel.

In the 80’s we saw corporates, mortgage lenders and insurance companies buying up estate agencies like hot cakes.

But what I foresee in the coming months is set to be less a cake sale and more a churning of dough on a rather more industrial scale.

Russell Quirk is co-founder of property PR specialist ProperPR and regular commentator on the industry and the housing market for broadcast media. The opinions expressed are his own.