Purplebricks has hiked its prices by nearly £200 – a 33% rise.
The business had been charging £599 upfront including VAT.
It is now charging £665 plus VAT, although it now says on its site: “No upfront payments whatsoever even on the cost of your EPC.”
“No upfront payments whatsoever” for sales appears to mean that valuation visits are free, as the site also says: “You only pay a fee if you decide to instruct Purplebricks.”
The “hybrid” agent launched in April in the south and has just expanded into the midlands, promoting itself on Meridian TV.
On its site its default comparison sets its £665 fee (shown without VAT) against an estate agent’s commission at 3% (also shown without VAT), and says that a saving on a £190,000 property would be £5,101.
Separately on the site, Purplebricks quotes a Which? Survey and says that an average estate agent’s fee is 1.8%.
The fees charged to landlords have also been re-structured to include options for paying nothing upfront.
At launch, landlords paid a fixed fee of £199 including VAT.
It is now charging £65 plus VAT upfront for a marketing service; £199 plus £20 per month plus VAT for a part-managed service, with the fee payable only when let; and £249 plus £40 per month plus VAT for a fully managed service, again with the fee payable only when let.
The site also names its “supporting people”. These include Allan Leighton, former ASDA and Royal Mail boss, and Paul Pindar, former head of Capita.
Last month, Britain’s most successful fund manager Neil Woodford invested £7m in Purplebricks, acquiring a 30% stake.
Purplebricks currently has 391 available properties for sale on Rightmove and 63 available rental homes.
Eye carried a story in March based on a funding brochure which said that it was aiming to list just over 15,000 sales instructions by the end of July. However, we were categorically told that all the numbers and figures we quoted within the article were out of date and inaccurate.
This morning, CEO Michael Bruce said: “Purplebricks continues to advance its customer offering and are very pleased to introduce the option for a customer to pay nothing at all on instruction, not even the cost of their EPC.
“We are at the forefront of engagement with customers and will always be refining our proposition so as to give them the most convenient, transparent and cost effective way to sell, buy and let their property.
“Customers continue to embrace Purplebricks as awareness grows and this will continue as we now start our accelerated period of growth and development.”
Comments (30)
I was tempted to invest in Mr Woodfords latest fund venture via my broker, but judging by his decision here Ill give it a miss.
It is interesting to see that a business in such infancy has had to adjust its pricing so dramatically. Similarly their claim to have 15,000 instructions by July has been missed spectacularly. Do these guys really know how to run an estate agency business?
Nick – I have just lost YET ANOTHER post due to your IT Team still not having sorted out a problem you assured last week was "a priority". I simply can't be chewed to retype it – the usual crew wouldn't have liked it anyway, and I'm the only one complaining… so maybe it IS an anti-PeeBee filter you have installed. Tell you what – I'll refrain from trying any more posting until you fix the problem. A great opportunity for you to leave as is and keep my generally unwelcome opinions off your pages…
Same thing keeps happening to me, albeit intermittently. May be a good time to change providers – one with faster loading pages as well 🙂
Nick & Ros….Re what we talked about, it seems to be working. Thanks for agreeing to secretly install it. x
That is very funny indeed, wilko!
Seriously, though, we are trying to get the problem fixed and apologies to PeeBee and anyone else affected. In fact, it would be very helpful to know if others are experiencing this.
As of the last hour or so, the problem still appears to be there, Rosalind – at least for me.
wilko – you should get 'Comment of the Week' for that pearler! ;o) I am sure that whatever you paid was in your opinion worth it to potentially avoid my further probing of your post on the other thread… I just hope you didn't commit to a 5-year term of paying, because things change even in a short timescale in our industry, you knows… and I'm back after a day's huffing – SO… you need to go back to that thread, I guess – you’ve got mail! ;o)
Oh PeeBee, you are in a bad place today…now I'll always be wondering what it was you had to say about this. I dont think anyone would describe your opinions as 'unwelcome' – that's really being hard on yourself. Controversial? …sometimes; thought provoking? …frequently; impassioned? …perhaps; but always entertaining, and always welcome, at least from my perspective. Keep em coming.
Hi Robin. Trust me – I'm in a good place – a really good place… always am. I don't think I'm being at all hard on myself – just realistic, and the very nature and content of many responses I receive stand as evidence. Your own comments are most appreciated, however, and I would like to think that my offerings are exactly as you describe them. I also have total belief in my stance on whatever subject I post. Otherwise, what would be the point.
Prepare post in Word, copy to Clipboard and it will sit there til you clear it out.
Hi Benay. How ironic that your advice to me is what I have long-suggested to others (but for different reasons…)! I generally 'copy' the post before pressing 'Submit' in case of problems – but when I'm looking through a red mist I tend to forget… and you can guarantee that it is THEN that I get an error message! Just adds to the annoyance – most of it by then being annoyance at my own numptiness…!
I think they've worked out that, if my area being in their core launch one and as a new start likely to be their best, is reflective across the country, they currently have about 25% of 2.3% online only market (in this area). If they extend that across the country, based on last years total properties sold in the UK, that only gives them a turnover of a shade over £3m. Even if the percentage of sellers doubled, which its difficult to see, that still doesn't offer them the sort of turnover that justifies a national tv and radio campaign or the sorts of costs associated with a head office call centre and national advertising and marketing agencies on board.
I dont understand how a company like this can offer a viable tenancy management service – can someone explain it to me? Who will conduct the regular management visits to the property? Where will the keys be held for contractors to collect when access is needed? Will they have a list of tried and trusted contractors in every area of the country or will they be relying instead on a universal 'service contract' provided by a national supplier (eg British Gas)? Are they cherry picking the services which can be provided remotely (rent processing) but not offering the services which can only be provided locally (viewings, check-in at the property, hand delivery of documents, personally checking the quality of maintenance and repairs carried out)? I presume this service is not going to be very suitable for landlords who don't live near their investment property either? BTW – their tenant fees are higher in every category than ours. I can't see this business being much of a threat.
Like I said…good that they are increasing fees…..their fees should continue to rise if they are doing a good job….As their fees continue to rise perhaps they will consider opening some shops in the high street….Be the first online agent to gain a massive advantage over its other online competitors by having high st branches!!! It could then start to compete for the other 98% of market share!!!
I'm really pleased they have increased their fees….They had to bearing in mind the large amounts of online agents currently offering between £69 and £349 for their share of the online market , what is only currently 2% of the entire market!
Those that claim to offer the same as high st agents (at a tiny fraction of the cost) are realising that they need to charge more to gain credibility over their "cheap as chips" rivals.
391 available properties for sale and 63 available rental homes…. These stock levels are a complete and utter joke! I'd expect an established online business like this to have property listings in the thousands by now – seems to me that the consumer has spoken.
perhaps easyproperty has taken them all? lol
Agreed it is a very poor showing and return for investors.
And also way below their initial projections and targets.
If agents lowered their overheads then they would not need to charge 3% to make a profit.
How many agents charge 3%? Across much of the country, 1.5% remains a challenge and many areas have fee wars where 1% is standard. It's ridiculous to use this as a comparison and immensely misleading for the public. Why not make it 4% and give the impression of even better value?
Agreed Eric……..1% is a battle around me…….I have CW agents charging 0.5% if you cancel other valuations and instruct immediately!
I was quoting what the original piece stated which was 3%. Apparently the average is 1.8%. That could easily be lowered through smarter business decisions and proxied to the consumer, alas, it won't.
Lowered their overheads? Other than the fixed costs of premises {ballpark 10%} what other overheads can be reduced? You recently made a sweeping statement about how Online agents can be infinitely cheaper than officed agents, I challenged that at the time and you ignored the opportunity to support your claim.
Here is another opportunity to explain your understanding of the accounting model of Agency.
Portal…You are WAY WAY off the mark with 3%….I've said it to you before "stick to the tech stuff" because you know very little about the real agency world"
PortalPerson, I get your gripe if you thought and believe all agents are getting 3%……but you are WELL OFF the mark……by 2% to 2.25% most of the time around me….! The only "lowering of overheads I could make by the way would be staff wages or indeed Staff numbers………do you think this is a route I should take?
surprise surprise…….. this model will not work at the levels they think they can charge. it wouldn't cover the costs of the staff let alone the marketing. not a bad idea but they will have to get closer to what 'most of us' charge to make it work and then its a nice level playing field. where they get average agent commission of 1.8% let alone 3% god only knows – be nice if we could charge those amounts!
like any startup purplebricks is adapting its model as it finds its feet this is true of any industry, businesses who do not flex their offering will quickly fail if the reality of their numbers do not meet their initial plans. I do think from a transparency perspective they should have stuck with a vat inclusive price as now some of their prices are inc vat and some ex vat which is somewhat confusing.
Finding their feet!?! … as with most of these online only agents, their charges were plucked out of the air and now they are realising that the poor take up is going to leave them running at a loss. Here endeth the first lesson!
I'm sure they are worth every penny…
We have one property being marketed for sale in our area by Purple Bricks. As a research exercise a member of staff registered and requested to view. It took PB 6 days to make contact.