The board of Purplebricks has issued a statement to the City saying it has no idea what lies behind the soaring share price the hybrid agency has enjoyed in recent weeks.
Its share price has risen around 40 per cent since the start of 2017 and - despite the statement from the board - it ended Friday’s trading at 189.01, almost twice the price of shares when it was originally floated at 100.00 just before Christmas 2015.
On Friday morning Estate Agent Today ran a story about its record closing share price the previous evening; later on Friday, after further rises, the Purplebricks board issed its statement, saying:
“Purplebricks notes the recent strong increase in the share price and confirms it is not aware of any reason for the movement, Whilst the company has had a good start to the calendar year, the board's expectations remain unchanged"
The previous day, Thursday, Purplebricks’ official Twitter account sent out this message: "January has been a record-breaking month for valuations & instructions, so if there's a right time to start your property search, it's now!" Shortly after the tweet, share prices for Purplebricks broke through the 200.00p barrier, although they eased before the close.
The agency is currently in the middle of its high-profile ‘Commisery’ TV campaign
It claims that the average fee paid by sellers to high street estate agents in the past year is £4,055 - an increase of eight per cent, significantly above inflation.
The hybrid agency says the £4,055 figure comes from analysis of Land Registry data and In high-priced areas such as London, the commission paid has almost hit £11,000.
Purplebricks says traditional agency fees have - in its words - “skyrocketed as house prices have risen.” In the 12 months to September the total value of houses sold in the UK through high street agents was £227 billion, on which they earned £4.089 billion, the equivalent of £4,055 per sale.
At the start of the campaign a month ago Purplebricks chief executive Michael Bruce said: “People too often engage an estate agent without realising or thinking about whether there is a better alternative. The service they receive is the same whether the house is valued at £100,000 or £1m, therefore the fee paid for securing the sale should be the same.”