Purplebricks has revealed it is considering changes to its pricing structure to correct “mistakes” of the past.
Chief executive Vic Darvey has told the Press Association news agency that the current flat fee model - £1,399 in London and £899 elsewhere - could be replaced by a more sustainable fee if the housing market continues to be sluggish thanks to Brexit and other factors.
“We’re going to start to look at how we evolve our pricing over time because our pricing has been pretty much the same for five years … With any successful business, you need to adapt and evolve your pricing strategy.”
Darvey tells PA: “In certain markets, in certain pockets of the country where houses aren’t moving quickly, there is a moment of hesitation from customers saying: ‘I know I can save £10,000 but actually do I want to commit to an £899 upfront fee when my house may not sell?’”
For some months there has been speculation that Purplebricks would bring in a no sale-no fee fixed price from late 2019, as well as retaining an upfront option for customers.
The chief executive admits that Purplebricks became distracted by its overseas adventures in the US and Australia - both now closed - and that the expansion had been a mistake.
“We were incredibly distracted by overseas expansion. We’ve admitted we made some mistakes. I think we’ve been really clear in admitting that we’ve made some mistakes and we need to learn from those.”
As the company now focuses exclusively on the UK and Canada, Darvey adds: “It’s really important now that we become a brand that is famous for exceptional service, as well as category-leading fees.”
He says a measure of this will be the degree to which he increases Purplebricks’ market share: currently the agency leads the online/hybrid field easily, but recent analyses say High Street traditional agencies still have between 93 and 95 per cent of the overall market share.
Darvey wants his company to have a 10 per cent share within five years and says that traditional agencies will fall in number.
“You’re going to see High Street agents continue to close more stores, and you’re going to see them move more to a hub model, where geographically they’ll start concentrating themselves, because it’s going to be possible to continue to support the overheads that are required if people are moving online” he tells PA.