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Purplebricks puts itself up for sale

ended 17. February 2023

Leading online estate agent, Purplebricks, today announced it could be sold as it announced a profit warning. The company said that while its brand had value due to its name recognition, it may reach its potential under an alternative ownership structure. We asked property experts for their views.

6 responses from the Newspage community

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Andrew Simmonds
Director at Parker's Estate Agents
20 or so years ago there was a dotcom boom with every service being taken online. While Purplebricks had an initial element of success, playing on itself being far cheaper than a high street agent, it failed to recognise certain aspects of traditional agency such as sales progression and soon became regarded as faceless. There has been absolutely no impact on high street agency. If anything, Purplebricks has shown that the future of estate agency firmly rests with professionals who are engaged with buyers and sellers, not just companies that whack up a few photographs on a portal and wait for the phone to ring.
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Riz Malik
Independent Financial Adviser at R3 Wealth
Purplebricks have their place in the market, but in life, you get what you pay for. We're financing a home for a  client buying through Purplebricks, and my client, a Millennial, has found the process to be smooth and efficient. Despite having diversified into other areas such as financial services, they will continue to suffer if the market remains sluggish through 2023. Their most valuable asset is their brand recognition, but I doubt that will bring them the bids they seek. When I tried to find out more information on their site I kept on getting a '404 page could not be found' error which doesn't look good for a company that prides itself on its tech looking for suitors.
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Justin Moy
Managing Director at EHF Mortgages
The signs of Purplebricks' demise have been there for some time. With their cheap fixed-fee model, they may have shaken up the estate agency model, but you need to drive large volumes for that model to be successful. And as the market cools, Purplebricks will be one of the first to suffer. Even their venture into mortgages has come too late to save them. There will be more casualties as firms look to cut costs, and unfortunately employees will be some of the first to go.
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Rhys Schofield
Brand Director at Peak Mortgages and Protection
In totally unshocking news, a business that lost a lot of money in a booming market is no longer viable in a normal market. Purplebricks have a few problems. They used to be seen as the 'cheapest' but aren't any more when the likes of Strike will sell your home for free, but then nor can they compete with a quality estate agent when it comes to working hard to sell your house for the most money, and thus become the actual cheapest agent, namely by leaving the vendor with the most money in their pocket. On top of that, they have seen a huge brain drain as their best formerly self-employed local property experts have seemingly left en masse to set up as their own independent estate agents as they feel they can earn more money and better serve their clients that way.
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Zaid Patel
Director at Highcastle Estates
The problem with Purplebricks is they focused on cheap price and quantity but poor customer service. The core of the estate agency sector is quality and personal customer service. It doesn't just need an alternative ownership structure, it needs an overhaul in the way it treats its stakeholders, from their local property experts to their vendors. Saying that, the brand definitely has value and if the marketing and concept from the new owners are spot on, they can easily be one of the big players in the market.
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Anil Mistry
Director and Mortgage Broker at RNR Mortgage Solutions
It's hardly surprising that Purplebricks' share price has fallen from over £4 per share to less than 10p, as their business model offers little incentive for proactive marketing of their clients' properties. Although their low upfront fee may appear attractive, once the client has paid, there is little incentive for the company to actively promote the property. Unlike traditional estate agents who receive payment only upon completion of the sale, they are motivated to actively market the property and increase the chances of it being sold. This lack of motivation on the part of Purplebricks may be why homeowners still tend to use traditional estate agents, resulting in the company's share price taking a hit and why it is now being sold.