One of Britain's largest estate agents has fallen victim to the slowdown in the housing market, prompting fears for thousands of jobs around the country. Shares trading was suspended in Humberts, which has 80 branches from Central London to Hampshire, amid doubts about its viability.

The group's demise would be the first high-profile estate agency casualty of the housing market squeeze.

Other companies, including Connells, the second-largest chain, have started to raise their fees in an effort to keep afloat as they struggle with an average 40 per cent decline in the volume of business since the new year.

Since the credit crunch, the number of mortgage advisers has fallen from about 30,000 to 26,000, according to the Association of Mortgage Intermediaries. It predicts a further fall of as much as 10 per cent across the industry as small brokers close down.John Charcol, one of the largest independent firms of mortgage brokers, is expected to announce redundancies in two weeks' time, after a review.

Humberts is understood to be considering a range of options to save its core business, from branch closures to putting divisions into administration and a sale of individual offices to local managers or rival operators.

Full-time staff numbers have already been cut from more than 700 at the start of January to fewer than 600 today.

John McLean, the chairman who was brought in at the start of the year to turn the business around, told The Times: “It is a very challenging market and you have to work far harder to sell. We are pushing up commissions but it is still far too low.”

Peter Rollings, managing director of Marsh & Parsons, the London estate agency, gave warning that up to a third of the estimated 12,000 to 14,000 estate agents nationally could lose their jobs over the coming year.

“It is painful out there and will remain so far certainly for a year. The loss of a third on the back of four years of ridiculous growth would bring it back to normality. It would end the oversupply of hopeless estate agents who in the boom pretended they could sell houses simply by sticking a board outside a home. Now the real estate agents are worth something.”

Marsh & Parsons has lost about 10 per cent of its staff over the past year. The firm has kept its standard commissions in London at 2.5 per cent for a sale, but Mr Rollings said: “Out of London I see rates rising from 1.5 per cent to 1.6 per cent but it should be 2 per cent - you can't make money below that.”

Jonathan Sedger, of Spicer McColl in Ipswich, said that prices on completed deals had already fallen by as much as 15 per cent this year, while deal volumes were down more than 40 per cent in recent weeks. “I think everywhere will suffer - even the hotspots. Nobody knows how far it will go.”

Connells, the 490-chain estate agency, has lifted its fees from an average of 1.6 per cent at the start of the year to 1.8 per cent today, its chief executive, David Livesey, told The Times. He said that at the end of the year the group would “end up with a slightly lower head count through not replacing staff”. Connells has about 4,000 staff but its business, like Marsh & Parsons, has a lettings agency that is still in good health.

Jonathan Cornell, director of Hamptons International Mortgages, the broker, said: “Transactions have fallen by approximately 40 per cent and we are losing business to lenders' direct channels. We are also having to turn away some borrowers for whom remortgaging is pointless. Our lives are very hard at the moment.”