When the going gets tough, the tough get going… and a lot of senior agency figures are doing just that at the moment.

Liz Hamson, editor of Propety Week

Over the past six months or so, scores of the industry’s biggest names have jumped ship either to join rivals in better (read better-remunerated) roles or to strike out on their own by setting up new niche firms.

Just this week, five former CBRE and JLL investment heavyweights launched ACRE Capital Real Estate to plug “a massive gap”, as they put it, in the investment advisory market. So why is everyone suddenly getting itchy feet?

It is surely no coincidence that next month is when the vast majority of firms are set to pay out their bonuses - or not, as is more likely to be the case.

ACRE Capital wide

(l-r) Richardson, Leach, Gamble, Wilson, Verrall left JLL and CBRE to this week set up ACRE - Source: ACRE launch

While the missed targets can’t entirely be blamed on the impact of the Brexit vote as we’d arguably reached the top of the market, and investment and leasing activity was falling away anyway, there is no doubt that the referendum was the final nail in the coffin for most people’s bonus expectations.

One senior industry figure tells me that across the big agency firms, true profitability in the UK is likely to be down about 30% on average, which means bonus pools will be down about 30% - and a lot of agents will be scurrying for the exit.

Not from across the piece, mind. Some service lines have actually seen an uptick in business - valuation and rating, for example. However, investment and leasing are not among them and while agents in these fields may have a rather inflated sense of what they are worth, they are all too aware that they are not going to get anywhere near whatever that is wherever they currently are.

Not just the big boys

That is just at the big agencies. Some firms further down the food chain have had an even tougher time of it.

These are the players not seen as best at anything and where the fast return to profit after the global financial crisis masked deep underlying problems, problems that are being cruelly exposed now.

Those with too heavy a reliance on residential are also in a tight spot, with the latest London market reports showing a fall in demand and prices.

In short, the recent flurry of departures could be just the beginning. As my source puts it, we could be set for “a merry-go-round of attrition and recruitment with, by summer, a few chairs being moved, the music still playing and ultimately nothing really changed”.

On the other hand, everything could change. Shrinking bonus pools are just one factor. As JLL has discovered, a management restructure can also set the dominoes toppling.

London houses

Now is not the time for an over-reliance on resi - Source: Shutterstock/Nadina

And what of Strutt & Parker? Andy Martin will lead his final partners meeting on Monday before he leaves the company to sort out its future.

The companies to really watch out for are those that decide, as Strutts may do, to make more fundamental structural changes by getting rid of senior players seen as overheads rather than dealers.

For months, the industry has failed to face up to the fact the market was going south. Now it’s time to look in the mirror.