The estate agency sector will see a two per cent increase in revenue from residential property sales between 2007 and 2011, a new report has predicted.

Research and Markets, a market analysis firm, said it believed that revenue would rise in the next four years from its 2006 level of £6.16 billion, commenting that the estate agency sector was "an industry that is gradually restructuring, with acquisitions and mergers topical issues in 2007".

"After the purchase of Countrywide Estate Agents by a private-equity group, there is speculation that another chain of agents will be acquired by another investor. Meanwhile, Strutt & Parker and Lane Fox are in merger talks," the firm said in a statement.

In recent months, a number of smaller estate agents have merged with others or been bought by larger groups, with the Neal Smith Partnership merging with Henry Adams in July and Humberts announcing it had acquired three agents last week.

The report also suggested that the "paramount" issues facing estate agents were the future of home information packs (Hips), which it suggested would end in "some form of compromise between continuation and outright abolition", and the growing use of the internet in the property sector.

Agents can purchase the full Estate Agents Market Report 2007 from the Research and Markets website.