Propertymark is to probe Purplebricks over its lettings fiasco - and as the agency becomes a subject of ridicule in the business world.
A statement last night from David Oliver, Head of Propertymark Compliance, says: “It is important that any allegation made against an agent be substantiated with viable evidence.
“As a representative body we take any allegations against our members incredibly seriously and we will be investigating the claims of failure to properly register tenancy deposits by Purplebricks.
“Legal procedures exist to protect both agents and their clients. Performing them properly not only protects agencies but is paramount for consumer confidence, providing transparency between businesses and their customers.
“Agents fight against a stigma and ensuring processes are in keeping with legal and professional standards is a key part in changing our reputation.”
Purplebricks says it expects to make a provision of millions of pounds to cover a long-standing blunder in its lettings management business.
Its early estimate of the costs is between £2m and £9m; the Daily Telegraph says it could be up to £30m.
The beleaguered agency was scheduled to have released its half year figures to shareholders today, but has now delayed these indefinitely.
Meanwhile in a separate article this morning, the Telegraph pillories the online agency for its almost non-stop record of crises in recent months.
The new article begins “Lurching from crisis to crisis, Purplebricks has been an exhibition in value destruction” and goes on to explain how the agency was once valued at approaching £1.5 billion and is now worth around £77m following a series of share price collapses.
Purplebricks made revenues of £91m in the year to the end of April, but a £9m hit for the rental mistake would have wiped out operating profits of £8.2m.
%20-%20IMAGE%20Client%20Accounting%20%E2%80%93%20what%20are%20your%20options.jpg)
Join the conversation
Jump to latest comment and add your reply
"It doesn't matter how much you spend on advertising, if the strategy is wrong, you're default dead." said venture capitalist, Paul Graham.
It also helps if there is someone capable leading the venture, as it lurches from crisis to crisis.
lot to be said for small independent agents at least if they go wrong there is less carnage.
I am sure they are quaking at the thought of Propertymark LOL
I am sure they are quaking at the thought of Propertymark LOL
If I was PB’s CMP insurers I would be somewhat worried assuming of course they are insured
Will Propertymark compliance do an audit to check compliance on the other day to day procedures otherwise what value is being a Property mark member and paying the fees and CMP insurance if they are not checking their members. I know what my clients will be asking going forward if this isn't followed up otherwise I can see Propertymark losing a lot of members unless this is dealt with and proper consequences for not following basic procedures since 2012
Also does the TPO & trading standards look into this as very much public interest
None
It is a worthless load of people pontificating and slapping each other on the back
All jolly good chaps
They are worthless
Purplebricks – an online national agent with no physical offices, a tiny workforce, and a cash upfront fee model – should be a cash cow that cannot fail given it has low running costs and instant cash each time a property is listed. After £460 million of investment and ‘cash’ from customers flowing through it in the past six years, its share price is 25p. And its ‘cash at the bank’ is only £56 million, with looming liabilities and litigation.
But it consistently lists more property than any other agent annually in the UK so, clearly, it has a market and yet it’s in trouble. Why? All decisions come from the board and c-suite, maybe time to look there for answers.
fgs its obvious the fees they charge are too LOW
JESUS WEPT it is not rocket science
Total nonsense. A service business competing on price? Inevitable failure. It never was, and was never going to be a cashcow. The problem with technology is that people think it can do the work for them. You still need to actually serve your clients, who are unfortunately, human, and respond to humans. The industry is far too labour intensive to be able to undercut everyone and survive. They were dead from the start and only investors cash (now up the wall of course) kept them going as long as they did.
Please login to comment