Low fee agents such as Purplebricks and some other online operators are generally not trusted by the public when selling their most valuable asset.
That’s the view of Anthony Codling, a long-time critic of Purplebricks and now himself a PropTech entrepreneur wit the platform Twindig.
Codling was responding to Purplebricks’ latest half-year figures which showed a year-on-year revenue drop of seven per cent and a year-on-year profits drops of 11 per cent to £26.2m, plus a 38 per cent collapse in instructions to 21,131.
He says: “To be fair, the group was dealing with internal challenges at the time and seeking to adjust its business model, but to have missed out on spoils of the strongest housing market since 2007, is perhaps the clearest evidence we have to date that the low-fee low-touch estate agency model is not one for the mass market.
“There is a place for the budget estate agent, but most do not want to go for the low-cost option when trying to sell their most valuable asset.”
By contrast Codling looks at franchise agency Belvoir, which also reported figures - this time for the full 2021 year.
Belvoir’s transactions increased by 43 per cent during 2021 and this agency - apparently unlike Purplebricks - took advantage of these market conditions and grew both organically and by acquisition.
Overall, it saw its revenue increase by 36 per cent in the year.
Purplebricks’ share price rose 0.3p yesterday to close at 20.30; by contrast Belvoir closed 21.0p up at 262.0p.
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They're not trusted because they have no message and no transparency.
They ARE trusted, their market share alone should demonstrate that to anyone objective enough. They are failing because their business model doesn't work, and I for one will be glad to see them go under. Labour intensive, service focused businesses simply can't scale based on a USP of being the cheapest unless they have some distinct advantage.
And PB don't.
They have simply bought market share with investor's money via mass marketing.
However, despite the fact that the economics of their business don't work, this marketing has been largely successful, and the size of their market share and consistency in growing it over the past decade proves quite unequivocally that the widespread public trusts them, certainly more than an 11% dip over the past 6 months 'proves' that they apparently don't.
Whether it will stay that way is a different question, but at the moment Mr Codling is talking out of his rear end because of his own vested interests.
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