However, it points out that 51.6 per cent is below the company's claim of 88 per cent and, unlike sellers using traditional agents, those who instruct Purplebricks have to pay the hybrid operator’s fees whether their property was sold or not.
Purplebricks’ latest results reported that its average revenue per UK customer was £1,138, Jefferies points out.
The consultancy - which in the past has been sharply critical of Purplebricks’ failure to release completed sales figures - says the agency has nonetheless been “an impressive disruptor”.
Analyst Anthony Codling writes: “We admire the speed at which PB has grown and the sheer scale of its ambition, from recording its first revenues in FY14 to disrupting the estate agency markets in three continents [Australia, US and Europe] by FY17. No one can doubt that it has disrupted the markets in which it operates and we can see the attractions of the revenue growth from its upfront fixed-fee model.”
But it points out that the 51.6 per cent figure suggests “the odds are finely balanced” and with around £1,000 at stake it is a close call for homeowners who will pay the fixed fees whether or not they sell their home.
Jefferies says sales rate is critical because on BBC Radio 4 back in October 2016, Purplebricks’ global chief executive Michael Bruce claimed the company sold 88 per cent of homes within 10 months and sold more houses as a percentage of those taken to market than any other agent in the UK.
“We have benchmarked PB's performance over the last 14 months against the performance of more than 7,000 different estate agency brands in the UK. Our analysis suggests that PB's success rate is near the middle of the pack. However, although only just over half actually sell their home, everyone has to pay. With a traditional high street agent, the homeowner only pays if the agent sells their home” concludes Jefferies.
The consultancy says its review of PB's accounting policies raises concerns because “either its contractual obligations to its customers end with their home being listed on the major property portals, or that revenue may have been overstated and deferred income provisions understated in its audited accounts.”
This evening Purplebricks refuted Codling’s analysis.
Lee Wainwright, Purplebricks UK CEO told Estate Agent Today: “Jefferies’ latest analysis is a marked improvement on its previous estimate of 14 per cent, which it later conceded was wrong.
“Today’s analysis is still wrong. The reason this analysis is incorrect is that it’s based on just one month’s data and does not include properties which have exchanged, have reached SSTC, or are on marketing breaks (ultimately we will market properties for as long as it takes to sell).
“There will still be sales that have completed but have not yet been uploaded to the Land Registry and there are also those properties that are still available for sale which will sell after the 10 month period.
“I know given my background of 28 years as managing director of High Street Estate Agents that the performance of Purplebricks is considerably ahead of that achieved by traditional agents and that’s why more and more consumers are choosing to use us.
“Since we launched just under four years ago we have completed on more than £10 billion of UK property and by injecting competition into the market have helped to drive down the average commission rate charged by traditional agents.”