Purplebricks’ share price is expected to take a further knock today after the Financial Times asked a question over the weekend that many within the industry have been pondering for some time – why has the company’s stock tanked when others have thrived?

Its 75% share price plummet so far this year has puzzled many, particularly when many of the firm’s traditional competitors such as LSL and Winkworth have enjoyed significant share price boosts from this year’s ‘blockbuster’ sales market, which is expected to reach 1.5 million transactions.

The FT reports that although Purplebricks will sell one in 20 properties on the market this year, it claims the company’s business strategy, along with its competitors’, has ‘run aground’.

Quoting data from TwentyCI, it says that the hybrid estate agency sector has seen its overall market share of exchanges slip from 8% in 2018 to 7% this year.

Purplebricks faces several headwinds in 2022 including a much-reported group litigation order and the huge costs of bringing all its LPEs and Territory Owners in-house following its announcement in August.

The FT also quotes several city analysts, who point out that, because Purplebricks takes much of its revenue on instruction rather than completion, it is feeling the heat of the ongoing instructions drought within the housing market earlier than its high street competitors.

Former city analyst and Twindig founder Anthony Codling says investors are also likely to be spooked by both its lower transactions overall due to Covid and its ongoing internal restructure.

“Strategic change is never easy and the Group must be congratulated for both appreciating that its original model was not working and trying to change it,” he says.

“The housing market is being blamed for Purplebricks internal growing or strategic transitioning pains. It will not be the first or the last to point to macro issues to explain micro-challenges.”

Read the FT report.