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TODAY'S OTHER NEWS

Purplebricks comes out fighting on behalf of all online and hybrid agencies

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.

  • Chris Arnold

    PurpleBricks, Homeowners Alliance and Agent4Me? A fine example of self-interest before that of the vendor.
    Vendors are being duped.

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    The savings claimed are only true assuming that the same selling price was achieved. I wonder if the slowdown in house price rises could have anything to do with potentially poorer sale prices achieved by onliners? In which case there are no savings being made. It would be a more credible claim if they also published “PurpleBricks has also received £100m in fees from people whose homes it failed to sell.”

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    Did they remember to add back in all the victims that paid CONmisery, where people have paid and NOT sold?

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    What ON didn't say was how much money they lost Vendors by selling at any price to get there fee.
    High street Agents hold your head high.
    High street Agents work hard to get the Maximum for there clients

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    PB and other on line Agents.
    Hold your head in shame
    All I see is reduced reduced reduced from you guys.
    Who's interest do you have at heart.

  • Jon James

    Perhaps they would care to publish the amount of money they have cost the public? As they have zero interest in negotiating a better price, costing people thousands of pounds. All whilst already being paid upfront with no interest in whether it sells or not. Wake up Britain, this is the biggest scam going.

    Anthony Alex

    Quite right Jon - but will the public see through the headlines? Sadly, I doubt it.

     
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    A rather poorly informed comment. Intelligent thought is the reserve of the well informed. The comments on this page are a reflection of panick stricken empathy for the guilty alongside a blatant denial of an appaulingly poor reputation cultivated over years of misconduct. Its a scientific fact that emphaphy represses analytic thought

     
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    That's great savings....does it cover the amount the vendors lost in the sales figures though??

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    And yes........ what they dont disclose is how many people pay their commission/ fee to Purple bricks and never get a sale, I bet that's an figure is an eye watering one !!!!

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    2.16 per cent in 2014?? yes that right... ha!

    This is a good read from Anthony Codling at Jefferies, only half the people (51%) that pay up front actually sell.

    'The £1,000 coin toss'

    https://javatar.bluematrix.com/pdf/xU6OXBQJ?id=Euro_Equities_All@Jefferies.com

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    Cannot dispute the fact that Purple Bricks can save vendors £000’ in fees same applies for other online agents. The bigger picture is being missed as there are no facts to show that they can sell a property for more money or quicker than a “normal” estate agent. The fact remains that if you save £5k on fees but sell for £10k less than you could of using a “normal” estate agent then your worse off selling with Purple Bricks! Having offered on properties marketed through Purple Bricks there is no involvement from the agent it’s left to the seller to decide what to accept, it’s all done online so no personal interaction either, no sales skills so essentially Purple Bricks are not earning their fee in any other way other than to stick it online and the rest is left to you! Furthermore how long does it take them to find a buyer? For most sellers every month a sale takes to complete it costs them a mortgage payment. So when save money on fees you can throw that back on mortgage payments when it takes take longer to sell!

  • Anthony Alex

    When will the public grasp that a detached, call-centre operation can never give the level of service that a competent, experienced estate agent can provide. Only when the market slips into reverse - and properties stop selling themselves - will this be appreciated.

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    where is the figure confirming how much home owners have lost due to the lack of ability to negotiate offers with multiple buyers and actually achieve the highest possible price? my guess is that it would be in excess of the £140 million pounds.

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    Save £1000 lose a £1000 - The homeowners can toss the coin. PB quids in either way....Welcome to the future of service and retail, never put the customer first.

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