Purplebricks has returned to the fray after recent controversies with a claim that home owners saved themselves over £140m in commission fees last year by opting not to use high cost traditional estate agents.
Using a research tool called EstatesAgents4Me, devised for the consumer organisation the HomeOwners Alliance, Purplebricks says this was “an enormous 60% per cent rise in savings ... compared with 2016.”
The hybrid agency says its customers alone saved over £100m in 2017 by using their fixed fee model “rather than paying much larger average high street commission rates.”
It says figures compiled from the HomeOwners Alliance and Land Registry statistics show in the West Midlands for example, where 85,000 houses changed hands last year, vendors were able to ‘save’ £13m they would otherwise have given to high street agents.
In the East Midlands where 80,000 homes were put on the market, those choosing online and hybrid agents saved £11.3m.
The data published by Purplebricks uses details from the sales of thousands of properties and shows the split between online and traditional agents in over 100 postcode areas.
It says a total of 1,067,000 homes were sold in the UK last year with buyers spending £235 billion moving home.
Purplebricks says the increase in competition from itself and other online and hybrids has put considerable downward pressure on high street commission rates from 2.16 per cent in 2014, to 1.5 per cent today. “This represents a saving of £1 billion to householders over the past four years” claims the agency.
It adds that in areas of high prices such as London the amount of commission demanded has risen to over £7,000 while in Kensington and Chelsea, which has the highest priced homes in the UK averaging £1.4m, commission charges top £20,000.
Scotland - where Purplebricks says it is now the biggest estate agency - has seen a surge in vendors switching to online and hybrid operators.
“The transparency, convenience and potential savings on hefty commission rates makes the decision a smart choice. The way that people buy and sell property has changed - people want the personal service of Local Property Experts in combination with great technology so they can transparently and conveniently interact and see everything that is happening 24/7” claims Lee Wainwright, UK chief executive of Purplebricks.
The agency gives a regional breakdown of what it describes as savings made by vendors using online and hybrid agents in 2017; this is based on an apparent 1.5 per cent average high street commission which it says was the norm last year:
South East - £29.2m saving (based on 149,160 sales);
South West - £14.1m (103,000);
Wales - £4.0m (47,454);
East of England - £21.6m (101,102);
Yorkshire and Humberside - £5.6m (84,490);
London - £21.5m (92,830);
Scotland - £7.4m (102,850);
North East - £1.8m (38,818);
North West - £9.1m (113,720);
East Midlands - £1.3m (79,530);
West Midlands - £14.1m (85,204).
Purplebricks says the commission rate of 1.5 per cent (inclusive of VAT) was calculated from a Purplebricks customer survey of 2,000 customers in December 2017, in which they were asked if they received a quote to sell their property from the high street and if so, how much they were quoted.
Its claim of commission rate of 2.16 per cent (1.8 per cent plus VAT) in 2014 is sourced from Which? And the agency uses Land Registry figures showing the number of sales and value of sales in each region in 2017.