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TODAY'S OTHER NEWS

Purplebricks in new share collapse as Omicron spooks investors

Purplebricks share price collapsed by another 9.6 per cent on Friday.

This means the agency has lost half of its share price in the last month alone, down 50.79 per cent in just over four weeks.

Since the start of 2021 it’s lost 74.22 per cent of its share value.

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Some will put Friday’s share collapse down to the emergence of the Omicron Covid variant - FTSE companies fell an average of 3.66 per cent that day, the largest single day fall for 18 months.

However, Purplebricks’ drop was well over twice that much and was worse than other agency industry share falls - for example, Foxtons dropped 5.75 per cent and OnTheMarket fell 4.52 per cent while some firms, notably LSL and Belvoir, actually bucked the trend and showed small rises.

Purplebricks’ share price dropped 37 per cent in just one day earlier this month following a profits warning over its “challenging” past six months - even though five of those months were during the stamp duty holiday, when most agencies enjoyed bumper business.

Since then some its customers have been caught up in the data and IT crash involving conveyancers at the Simplify Group, while last week Purplebricks admitted that its own systems problems meant it failed to comply with the law requiring rental deposits to be placed in a government-backed scheme - although it refused to say how many and how long deposits were held by the agency before they were eventually placed in an approved scheme.

On Friday share prices for HSBC, Lloyds Bank, NatWest and Barclays all fell about 7.0 per cent - the biggest FTSE 100 riser was food delivery firm Ocado, up 4.5 per cent on anticipation of more business if tighter restrictions are reintroduced.

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    I still don't understand the point of p/bricks. All things being equal, if I was a buyer I would make a lower offer in the knowledge that there is no middle man. Likewise, if you are vendor and your property is not selling quickly, you are more likely to take that offer as you are not paying an estate agent.
    In a busy market, as the article suggests, owners by-pass the online only agents.
    Newspaper journalists tend to talk about "saving money" by going to online only, I don't doubt it happens some of the time, just not most of the time. It is a false economy. The buyer is the one more likely to benefit.

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    However bad a business PB are (and they ARE a bad business), their market share indicates quite clearly that there are plenty of people out there who want to use them, whatever the market conditions. There are a whole lot of economically ignorant people out there, both vendors and landlords, who attribute cheap or free with value. I agree with you that's it's a false economy, but neverthless, it takes a lot of pain or education for people to accept this and not be immediately suckered in by the lowest price.

     
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    The decline now coming to a head started February 2020 when the PB management thought they were cutting a big slice of ‘employment’ costs by binning hundreds of Territory Owners that were actually self-employed and cost PB little or nothing. Always thought of by PB as employees! What they actually did was close hundreds of successful and productive local business units that together made PB a national network success. The drop in PB instructions during the pandemic when most other agents have been busier thanks to the stamp holiday backs this up. If a premier league team sold ¾ of its squad and didn’t replace them then they would also slip down through the divisions as we have seen here, that manager would have long since been sacked though.

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    Blaming internal software issues for not placing bonds in government schemes on time........ cashflow problem?

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    Unless another miss-guided fool invests in PB, THIS COMPANY IS DOOMED. Their sole existence is based on a rediculously large unsustainable marketing budget. I give them 18 months max. I remember bitterly what damage this company did to our industry and can't wait to wave cheerio to this flawed way of selling houses.

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    When they go another one will spring up

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