An analysis of one month’s listings on Purplebricks by City consultancy Jefferies concludes that it sold 51.6 per cent of its homes within 10 months.
It points out that 51.6 per cent is below the company's claim of 88 per cent and, unlike sellers using traditional agents, those who instruct Purplebricks have to pay the hybrid operator’s fees whether their property was sold or not.
Purplebricks’ latest results reported that its average revenue per UK customer was £1,138, Jefferies points out.
But it points out that the 51.6 per cent figure suggests “the odds are finely balanced” and with around £1,000 at stake it is a close call for homeowners who will pay the fixed fees whether or not they sell their home.
Jefferies says sales rate is critical because on BBC Radio 4 back in October 2016, Purplebricks’ global chief executive Michael Bruce claimed the company sold 88 per cent of homes within 10 months and sold more houses as a percentage of those taken to market than any other agent in the UK.
“We have benchmarked PB's performance over the last 14 months against the performance of more than 7,000 different estate agency brands in the UK. Our analysis suggests that PB's success rate is near the middle of the pack. However, although only just over half actually sell their home, everyone has to pay. With a traditional high street agent, the homeowner only pays if the agent sells their home” concludes Jefferies.
The consultancy says its review of PB's accounting policies raises concerns because “either its contractual obligations to its customers end with their home being listed on the major property portals, or that revenue may have been overstated and deferred income provisions understated in its audited accounts.”
Credit: Estate Agent Today