New Purplebricks fees structure likely to be revealed next month

It is widely expected that Purplebricks will shortly reveal the result of an experiment with a number of different pricing strategies.

The exercise began last year and is thought to have been continued in the New Year, ahead of the market closure prompted by the pandemic.

The chosen option - which could in theory be 'no change' from its existing model - is expected to be revealed when the agency produces its interim results on August 3.

In December Purplebricks announced that it was embarking on a pricing exercise involving what it called “four different pricing methods” - no other details were released. 

A few weeks before that Purplebricks increased both its upfront and deferred payment prices by £100; for new customers this rise meant £899 went up to £999 outside of London, while the London-and-surrounding-areas fee of £1,399 went up to £1,499. 

All fees are charged whether the vendor’s property is sold or not.

For those fees, which include VAT, vendors receive a valuation, floor plans, listings on portals and the services of a Local Property Expert. Most other services, such as accompanied viewings, involve additional fees. 

The October 2019 increase was the second rise within 12 months - in November 2018 prices rose from £849 to £899 outside London and from £1,299 to £1,399 within.

Yesterday The Times speculated that as Purplebricks’ share price had fallen 60 per cent this year (and in reality much more over recent years), and the company had recently sold its apparently-successful Canadian business, is was “difficult to see how it will grow from there.”

The paper’s Tempus column - which recommended investors with Purplebricks shares to hold on to them - speculated that with uncertainty  plaguing the wider economy and some aspects of the housing market, the future for Purplebricks was by no means assured.

“It remains to be seen whether sellers of homes will risk paying a fixed fee in a market where there is so much uncertainty” it says, adding: “Given the uncertainty, people could prefer traditional agents which offer a higher level of service and accountability.” 

Tempus' advice to shareholders was to 'Hold' with the reasoning: "Poor visibility on outlook for the housing market and demand for online agents."

Here's our story from last week about the unexpected sale by Purplebricks of its Canadian business.