Countrywide, the UK’s largest estate agent, is facing an avalanche of legal claims dating back to valuations it gave prior to the credit crunch in 2008.
Provisions made in the last two years against legal claims have topped £21m. The cost in 2011 was £9.4m, significantly more than the company’s loss for the year of £7.3m.
There have been over 100 filings at the High Court against Countrywide or its subsidaries since January 2011.
The vast majority of the cases have been brought by mortgage providers such as Bank of Scotland, Barclays, Yorkshire Buildings Society and Northern Rock.
In its accounts Countrywide said: “In common with others in the industry we continue to experience professional indemnity insurance claims in our surveying division arising from the property market between 2004 and 2007. An estimate of these exceptional losses was established at the end of 2010 and further data and trends have resulted in an exceptional charge of £9.4 million in 2011.”
The cost of fighting the cases over the last two years, £21.3m, is roughly equivalent to the loss Countrywide has suffered over the same period, £20.3m.
Countrywide owns 47 brands including Hamptons, Taylors, Bairstow Eves and Andrew Reeves. Turnover for 2011 was £498.9m, up 6.4pc on the previous year. The loss before tax reduced from £13m to £7.3m.
Countrywide has one of the most active surveying departments in the country leaving it particularly vulnerable to claims arising from the boom in the housing market between 2004 and 2007. While the bulk of the claims are against Countrywide Surveyors, a number are against its subsidiary SecureMove Property Services.
A spokesman said Countrywide carried out over 1.7m valuations between 2004 and 2007. The number of claims it was facing was therefore a tiny fraction.
The company said it expected the claims would tail off but declined to comment on the current level.