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Purplebricks’ listings grow at expense of Your Move

Anonymous website claims the hybrid agency is No.1 brand by listings and the third largest by agency grouping.

Nigel Lewis

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An anonymous website has published details of UK property listings which places Purplebricks in poll position.

Called EA League Tables, its unnamed publisher claims to have spent considerable time researching the data, which is a snapshot of properties for sale but not under offer or SSTC and which excludes commercial or new build properties.

It claims that Purplebricks has the largest number of properties for sale in the UK at 16,284 followed by Connells’ estate agency William H Brown at 5,316, Connells at 4,820, Hunters at 4,758 and Your Move at 4,661.

The researchers also looked at estate agency groupings, placing Connells first at 19,294, Countrywide second at 17,143 followed by Purplebricks.

LSL is the fourth largest grouping with 8,351 listings with Spicerhaart in fifth position at 5,333.

Purplebricks has added approximately 2,000 listings to its total since 2017 largely at the expense of Your Move which has lost a similar number of properties for sale.

The other major estate agency brands have largely been trading water over the past two years, the data shows.

This includes William H Brown, Hunters and Connells although several have lost ground including Foxtons, which lists 1,153 fewer properties than it did in 2017.

The website, which is publisehd using the Godaddy.com platform, lists the top 20 agencies in the UK, also now includes three hybrid/online agencies (Purplebricks, Yopa and ExpressEstateAgency), two more than it did two years ago.

December 19, 2019

2 comments

  1. Maybe the same website should publish an annual list of which agent is making the largest profit, in descending order, I think it would surprise many.

    It would be interesting if any online agent would actually be in this making ‘profit list.’

    And maybe the same website should publish a separate list of profit as a % aggregated out across the branches, eg, £5M profit for the group of 367 offices = £13,623 gross trading profit a branch.

    This again would startle many as to the wafer thin margins some are trading on.

  2. As they say statistics can prove anything you want them to, but here are a few pre-Christmas thoughts.

    Purplebricks have over 500 Local property experts/listers who are self-employed owning their own company. This means that on average they each have listed for their company around 30 properties currently for sale. 16,000 instructions divided by 500 LPE’s.

    Purplebricks unlike most other agents, turn each instruction into upfront cash, typically a spend by the vendor of £1,300, so that 16,284 of listings means close on 21M of fee in their bank, and that is just for listing.

    So, a good model for their cash flow. But, why then do Purplebricks lose/burn around 3M more each month than they get as income?

    In April 2018, they had 150M sitting in their bank according to their annual accounts, in the next 12 months despite taking to the market thousands of properties, they managed to burn through 7.5M of cash each month, more than their incoming cash, a staggering 90M burnt through in the year, leaving them with only 60M in the kitty by April 2019.

    In their latest financial report, they have burnt through another 19M since April, leaving just over 41M. Which if they burn through 3M a month, means they will run out of cash in 14 months.

    The reason perhaps Purplebricks has so many instructions is that it is ‘buying the market’ which is fine if you have the cash to keep the company moving forward, but unless there is another round of capital funding to underpin the company, it simply will run out of cash.

    It was alright when private investors and the founders pumped their own money into the company, followed by capital generated by listing on the the Alternative Stock Market, etc, but, with the share price in the doldrums in real terms, and six major online agents withdrawing or being forced to withdraw I feel there is little appetite to get fresh investment.

    The most likely outcome is that Axel Springer will take them private, re-jig the model, make it cheaper to run and it will service a certain sector of the market and type of vendor who is price sensitive to fee.

    Perhaps, the lesson for other agents is that taking a fee of some description upfront, sale or no sale is not a bad idea, it helps with offsetting costs, gains commitment from the vendor and should help cash-flow, all positive things.

    Back to statistics, having a huge market share of property for sale, is also not really a sign of anything, as we know that Connells or the Skipton building society – will return multi-million pound profits at the end of its financial year, whereas Countrywide who in this snapshot has only 11% less stock for sale is unlikely to be in the same position.

    Turnover is vanity, profit is sanity.

    My advice for Purplebricks, would be, stop being a digital mirror image of an estate agent, and add more to your offering, then you can charge more in fees, probably as much as £1,000 a unit. At present you just do what agents do without having physical offices – hardly world changing.

    An online agent – should be a tech driven, proposition, smoothing the path for vendors and buyers, landlords and tenants, offering an omni-channel ride of excellence to an eager and button pressing nation, Vic Darvey have a look around there are plenty of places to find proptech that will advance your game, maybe start with Unissu.

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