Purplebricks has rebuffed a report issued yesterday by City investment analyst Jefferies which claimed that the company only sold approximately half of all the properties it lists for sale, and advised investors to sell their shares in the company.

The Jefferies report, while praising the rapid rise of Purplebricks, criticised the company for not revealing how many houses it really sells and that, sellers who were not successful using their service had already paid up-front for the service.

Analysts at Jefferies also wondered what would happen if the “model stumbled” when consumers realised the service they pay for isn’t a guaranteed sale.

The revelation prompted a steep decline in the company’s shares yesterday, which dropped in price by 7.5% on the AIM stock exchange during brisk trading.

Single month

Purplebricks says the data used by Jefferies to make the claims was based on just a single month’s trading and “does not include properties that have completed but have yet to be uploaded to the Land Registry,” the company says in a statement this morning.

It also says its full-year trading remains in line with expectations.

The hybrid agent also says the data used did not include properties that had exchanged, were sold subject to contract or on ‘marketing breaks’, and says it sticks to its previously held claim of a 78% sales rate.

This is based on its own January figures, which reveal that it received 6,160 instructions and took 4,618 of them to ‘agreed sale’ status.

“Purplebricks firmly refutes the criticism in the research note of its revenue recognition policy and stands behind both the fully audited results and the accounting policy itself,” the company says.

The company also claims to have sold £10bn worth of homes in the UK since start-up, and that its share of the online market has increased to 77%.

Read more about Purplebricks.