Property Natter: has Purplebricks' bubble now officially burst?

Whether you love or hate it, Purplebricks has undoubtedly left its mark since arriving on the scene in 2015 – much more so than any other online/hybrid operator before or since.

If nothing else, it’s been excellent at building a recognisable, well-known brand – whether through those (frankly very irritating) commisery adverts, extensive nationwide marketing campaigns, boards all over the country, the distinctive purple branding or the bullishness of the Bruce brothers. Not to mention the rapid expansion, the huge investment and the attempts to break markets overseas before really conquering its domestic one.

However, despite this significant investment, heavy advertising and strong brand awareness, it’s been a troubling period for the agency that riles up traditional agents perhaps more than any other.

At the beginning of this month, Swiss bank UBS slashed its share forecast for Purplebricks, citing concerns over the long-term viability of its international activities in particular. It warned that the agency wouldn’t be breaking even in Australia until 2022 and suggested that the US operation will not see a profit until 2025.

Just a few days later the shock news broke that founder Michael Bruce was leaving the business and its Australian operations would also be shutting, with the firm saying that its rate of geographic expansion had been too rapid.

In the wake of this news, Purplebricks’ share price slid even further, having been on a downward trend since the highs experienced in July and August 2017. Over the last year, for example, it’s fallen from around 380p to 109p.

As worrying as these trading knockbacks is the negative press Purplebricks has received in the mainstream and trade media, and the scathing comments we’ve seen below our articles – not just from traditional agents naturally hostile towards the brand but also in some cases former investors and employees giving both barrels to Bruce, the Purplebricks board and the company as a whole.

Purplebricks may still recover from these recent setbacks – and it’s still comfortably the biggest online/hybrid player and the most effective disruptor we’ve seen – but the reputational damage it’s received in recent weeks may start to feed into the consciousness of the wider public, who in many cases are likely to be aware of the brand but not entirely sure what it does. If Purplebricks becomes a tainted brand, the future of the company itself could be thrown into doubt.

It seems to have unlimited resources and investment in a way that Emoov and other online operators simply don’t have, but if the investors start to get spooked – as the recent trading results suggest they might be – there may be trouble ahead for a brand that divides opinion like no other.

In the interests of fairness and balance, I should also mention the continuing struggles of a traditional agency giant – with Countrywide experiencing a record low share price at the start of May, while in recent days EAT revealed that it has started a programme involving branch closures and redeployment of staff.

It may be a case of companies aiming too big and failing, with smaller being better as resources, personnel and funding aren’t spread so thin. Maybe that, and not mega-agencies with nationwide operations, is the future for agency? 

And the award goes to…

Many agents are still thriving, of course, something which was amply displayed at the most recent ESTAS (aka the Property Oscars) last Friday. Thousands of estate agents descended on Grosvenor House Hotel on London’s Park Lane to drink, eat, celebrate and be merry. Now in its 16th year, and with TV royalty Phil Spencer, as ever, handing out the gongs, it’s a special day for the industry and provides added kudos to the winners when you consider the awards are based purely on the results of a customer service survey completed by thousands of sellers, buyers, landlords and tenants.

We covered the estate and letting agent winners on the day here and here, while The ValPal Network was delighted to win an award of its own – Best in Sector Online Valuation Tool for the third year running! This further confirms our growing evolution and is testament to the fact that we offer our agents the best possible service by constantly launching new features (such as ChatPal and PortalPal) and providing the best nurture journey in town (this helps the user to book in an MA and apply for other services like mortgages and conveyancing, which all helps to make an agent money ahead of the fees ban!).

I should also congratulate Holroyds for winning the best ValPal agent award. A family owned and operated estate agency in Yorkshire, launched by mother and son team Julie and Chris Holroyd in 2015, it aims to show the Yorkshire property market that not all estate agents are the same by offering something different and delivering a thoroughly proactive approach. Well done on your award win, guys. Very well deserved.

Peering into the future

It’s that time of the year again, when events, awards evenings and conferences go into overdrive. And so, just a few days after the ESTAS, it was time to head to the impressive Business Design Centre in Islington to check out the latest incarnation of FUTURE: PropTech – now the most established and biggest of all the PropTech events in the UK.

This year’s programme was especially interesting, with panel discussions on improving housing supply, the rapid growth of the Build to Rent sector, smart cities and urban mobility, and how institutional investors can use technology for better decision making. It also featured keynote speeches, networking opportunities, case studies and a 5th anniversary after-party.

The event was bigger than ever this year, with so much to see and so many people to meet. As well as a huge number of stands and presentations focusing on the wider theme of PropTech, this year we were also treated to a residential agent’s zone specifically for our sector.

It provided agents and suppliers with a great opportunity to catch up, discuss ideas and formulate future plans. There was also a small stage, hosted by Kristjan Byfield and Charlie Wright, which saw a number of interesting debates and presentations across the day. The headline act, you won’t be surprised to hear, was Emoov founder Russell Quirk talking about the perceived failure of online estate agents.

As for the most important part, lunch –  well, there was an array of complimentary street food providers to choose from courtesy of StreetDots, who kept 2,000+ delegates happy with offerings from all over the globe. It was a great day spent celebrating the fifth anniversary of this innovation-focused event and I, for one, am already looking forward to next year’s instalment!

James Dearsley gives an excellent, comprehensive review of the conference in his latest weekly PropTech Today column – hailing it a 'well-attended' and 'truly global affair'. Well worth a read for those looking for a more detailed breakdown of what the conference included.

A battle for the property crown

A busy few days for the Angels Media, Estate Agent Today and TVPN team became even busier this Friday, when we took part in the inaugural Property & Construction Cup, the first tournament of this year’s Corporate 5’s Cup series, which ends with a Grand Final in October 2019.

In the test event, last November, we won two and lost two, narrowly missing out on a quarter-final place. Hopefully we've gone a couple better this time! Thanks to copy deadlines, it’s not yet clear how well we’ve done, but what can be said with some certainty is that it would have been a great day of networking, team-building and friendly competitive rivalry while playing a game we all love.

Some of the teams also flying the flag for property at the event in Oakwood, North London, included Ludlow Thompson, Hamptons International and Drivers & Norris.

Speaking of football and property, congratulations should also go to Ben Brown (aka Vardy Party) for winning the first ever Estate Agent Today & ValPal Fantasy Football league. It was a competitive field, with 140 teams in total competing for the title, so kudos to Mr Brown for coming out on top. He can now have a party of his own! Keep your eyes open for a re-run next season.

Until next time...

*Nat Daniels is the Chief Executive Officer of Angels Media, publishers of Estate Agent Today and Letting Agent Today. Follow him on Twitter @NatDaniels.