A leading London property agent has claimed that Purplebricks is misguided after the agency revealed that it had moved its valuations operation to a digital-only service during the Coronavirus crisis to continue gaining instructions.
Lee James Pendleton, Co-Founder of London property experts James Pendleton, says inviting vendors to sign up to its ‘pay up front’ option is unwise because customers will be paying for a service that Purplebricks is ‘very unlikely’ to deliver on.
“I am surprised that they are asking people to pay money to them for a service that the government has said should not be happening,” says Lee.
“Ministers should be advising them, and any other agents that are touting for business with up-front fees, that they can’t be taking money off people in the current climate. It’s not ethical or the right advice. The property market is simply frozen and should not be taken advantage of.
“Before the crisis those paying for Purplebricks pay-up-front service were always taking a gamble that a buyer would be found, but now there’s little or no chance anyone is going to transact property in the current economic situation.”
Pendleton (left) says that, because the banks have withdrawn a number of mortgage products, local searches have stopped and the government is advising people not to move, the only people buying homes at the moment are cash rich investor ‘vultures’.
“We’ve had several calls from investors offering to buy homes at a 30-50% discount, but we’ve told them what to do with that kind of offer as we are protecting our clients now and for the future,” he says. “It’s the only kind of buyer that Purplebricks is likely to find for their vendors at the moment.
“Purplebricks is asking people to market their properties to find a sale in a market where no one has any idea what the future holds.”
Purplebricks’ ‘pay now’ option requires vendors to pay a fee of £999 (£1,499 in London) upon being instructed.