Hybrid estate agency Purplebricks is getting ready to offload its lettings business following the rental deposits protection problems that hit the firm late last year, it has been reported.
The Telegraph, which has only recently become interested in the firm, says chief executive Vic Darvey has held internal discussion to sell its lettings, which for many years has consistency under-performed its sales counterpart.
Currently, for example, Purplebricks lists just 25 properties in central London compared to 1,765 homes for sale in the same area.
The difference between the two businesses is not surprising – almost all its marketing budget goes into its sales offering while its lettings division has little to offer landlords and tenants that’s different to the firm’s traditional competitors.
It has also been reported that the lettings arm accounts for just £6.6 million of the firm most recently reported turnover of £91 million.
But although lettings has for many years been its Cinderella operation, it was dragged into the spotlight last month when an IT glitch was discovered to have exposed Purplebricks to compensation claims of up to £9 million.
The glitch meant thousands of tenants were not informed correctly where, when and how their deposits have been lodged with one of the approved deposit schemes – a legal requirement that means their landlords or Purplebricks could have to pay compensation of up to three times the original deposit.
Purplebricks has declined to comment on the claims made by The Telegraph.