BREAKING PROPERTY NEWS – 25/05/2022

Daily bite-sized proptech and property news in partnership with Proptech-X.

 

As instructions drop by 31%, is this Purplebricks’ swansong?

Purplebricks has always been a cash cow. Its upfront payment business model always meant that its coffers were full of cash as soon as vendors listed their properties, sale or no sale. A great model, apart from the fact they only ever made a profit once in all of their trading life and that was a tiny profit mostly made from the one-off sale of their assets overseas.

Now though, this payment model is biting them deeply on their purple behind, as the volume of vendors who listed with them last year was 31% less than the previous year. Listing only 40,141 properties against 58,043 the previous year, it’s no wonder Vic Darvey was keen to move on and let the incumbent CEO Helena Marston explain this to the shareholders later in the year.

In figures, Purplebricks will do around £70 million, making a loss in excess of £8 million, but its biggest problem is the cash at bank figure which is likely to be around £43 million. This sounds like a big enough war chest to get the company out of trouble, but with the share price dropping 25% since January 2022, and trading at just 17.8p on the AIM, plus a possible class action looming and a multi-million provision needed to cover their lettings deposits debacle, might this be the tipping point for Purplebricks?

Looking at the next year, these are Helena Marston’s big problems:

Fewer homes will be sold, so Purplebricks needs to get a bigger slice of a reducing pie. Land Registry is already showing that year on year for March, completions are down by 13%, so sales volumes and instruction volumes are ticking downward.

The Purplebricks model is inextricably linked to a cash upfront, and it had the advantage when it first launched that it was a cheap option, now with raised fees it is in some areas on a par with traditional agents.

It has moved to a PAYE model, which means extra costs and liabilities, and though it does not have physical offices, the cost of TV and other advertising is probably on a monthly basis somewhere near these costs. So what was seen as an agile model, dump staff and branch costs, is in fact a fallacy.

The threatened class action and all the fallout and negative press can really damage a business, as reputation is paramount and the public are fickle, they tend to swerve businesses that are perceived to be unfair to their workers.

Helena Marston’s biggest problem as she captains and steers the ship is the fact she has zero experience of selling property or letting property. Significantly, Countrywide PLC appointed a certain Alison Platt as CEO in 2014, also with zero experience, at that time the UK’s largest estate agency group.

Four years later, Platt resigned after two profit warnings in three months and the share price had been driven through the floor. That company limped along like a wounded dinosaur until its assets were picked up by an enterprise that turned them around in 18 months.

Because they had a management board packed with experienced property practitioners whose DNA was estate agency, Connells Group is now the most profitable and largest agent in the UK. Experience counts.

Experimentation and inexperience is a risky strategy when a company has little cash to spend and is possibly facing a substantial multimillion legal battle. I hope Helena knows what she signed up to.

 

TDS appoints Nathan Emerson of Propertymark

The Dispute Service (TDS) is delighted to announce the appointment of Nathan Emerson, CEO of Propertymark, to the Board of TDS.

As the CEO of Propertymark, Nathan is keen to further the shared values of professional standards in the industry and to continue ensuring that Propertymark members’ interests are well represented.

“Propertymark was one of the founders of TDS in 2003 along with RICS and has been continuously represented on the Board ever since.  Nathan replaces Mark Hayward who has now retired, and I am delighted Nathan has joined the TDS Board to further strengthen the long-standing partnership between us.” said Steve Harriott, CEO of TDS.

Nathan commented: “I am really pleased to take my place on what is a very active and forward-thinking Board at TDS. I want to be able to champion the interests of agents whilst supporting the Board to deliver its strategy and achieving its goals.”

TDS is a key supplier to the private rental sector, operating tenancy deposit schemes across the UK with over £2 billion of deposits protected.

TDS was originally set up in 2003 by ARLA and RICS as a not-for-profit company limited by guarantee, to operate a voluntary tenancy deposit scheme on behalf of ARLA and RICS lettings agents. One key element of the relationship is that TDS is able to offer Propertymark and RICS preferential deposit protection rates through the links with the two founder organisations; a key benefit for Propertymark and RICS agents.

TDS also operates the Tenancy Redress Service, TDS Resolution, TDS Northern Ireland, SafeDeposits Scotland, and has recently been selected as the New Homes Ombudsman.

TDS protects c1.8m deposits across the UK [at a value of £2bn] and deals with 21,000 tenancy deposit disputes a year.. It has established two charitable arms [TDS Charitable Foundation and SafeDeposits Charitable Trust], which distribute grants aimed at raising standards in the private rented sector.

Andrew Stanton

CEO & Founder Proptech-PR. Proptech Real Estate Influencer, Executive Editor of Estate Agent Networking. Leading PR consultancy in Proptech & Real Estate.

You May Also Enjoy

New Build for Merseyside
Breaking News

First-time buyer demand falls sharply

First-time buyer demand falls sharply across Britain’s major cities, with Nottingham leading the decline The latest research by Yopa has shown that first-time buyer demand has dropped significantly across a number of major British cities, with Nottingham seeing the sharpest decline since the start of the year. Yopa analysed first-time buyer (FTB) demand based on…
Read More
Breaking News

Families to save hundreds of pounds through major homebuying overhaul

·        Buying or selling a home to be faster, cheaper, and easier under common-sense reforms ·        First-time buyers to save £710 on average, putting money back into people’s pockets ·        Proposals will halve number failed transactions, preventing last minute fall throughs, slashing weeks off the process and driving up standards across the board Hundreds of thousands of first-time…
Read More
Estate Agent Talk

Got a New Home in Nelson UK? Explore Stylish Furniture for Every Corner

Moving into a new home is always exciting, and if you’ve just settled down in Nelson, UK, now is the perfect time to furnish your space with stylish, functional, and long-lasting pieces. At AH Interiors Nelson, we bring you a wide range of modern and classic furniture that makes every corner of your home truly…
Read More
Breaking News

Annual house price growth steady in September

Annual rate of house price growth of 2.2% in September, similar to 2.1% seen in August Northern Ireland remained the top performing area with annual house price growth of 9.6% Outer South East weakest performing region, with 0.3% year-on-year rise   Commenting on the figures, Robert Gardner, Nationwide’s Chief Economist, said: “The annual pace of…
Read More
Rightmove logo
Breaking News

Rightmove launches Online Agent Valuation to help agents connect with more vendors

Rightmove, the UK’s largest property platform, launches Online Agent Valuation, a new product for agents designed to give them more ways to reach prospective vendors. The consumer innovation delivers quality leads by connecting agents with home-owners who are serious about moving, but who would prefer to get a valuation from a local agent online. Rightmove…
Read More
Breaking News

September sees highest number of homes listed this year

September brings post-summer surge in home seller activity, with highest number of homes listed so far in 2025 The latest internal data from eXp UK has shown that September has delivered a notable surge in market activity, with the firm recording an average of 81 new properties listed every day over the course of the…
Read More