Purplebricks
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Both Purplebricks and OpenRent change claims made on their websites following ASA investigations
Two of the UK’s largest online agents have been reported to the Advertising Standards Authority (ASA) about misleading claims on their websites. The first is Purplebricks, its 11th referral since it started up in 2015. A complainant challenged whether the way the company provides information about its standard fee of £849 was misleading. An icon is positioned next to text saying “our standard fee £849” which, when hovered over, pops up with the text: “This is our standard fee for everywhere outside of London and surrounding areas, where we charge £1199 inc VAT. Around 40% of our customers pay us a fixed fee of £300 to cover ALL viewings”. The complainant understood that the average fee was therefore likely to be higher than £849 and challenged whether this was misleading. The ASA says it agreed, saying that “we noted that it was only when a user hovered over the icon that information about the additional cost for the viewing service became visible”. “We approached the advertiser with our concerns and they agreed to amend their website.” Instead, the Purplebricks site now says “viewing service is optional £300” on the main page, rather than as a pop-up. OpenRent complaint The second…
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Traditional agents just ‘twiddle their thumbs’ in their high street branches, suggests Purplebricks
A video published recently on YouTube by Purplebricks suggests that traditional estate agents just sit and “twiddle their thumbs” in their high street branches. The 30-second video, which has attracted nearly half a million views since it was published both on its own website and on Youtube, features an apathetic woman reclining on a couch who asks whether, if she uses Purplebricks, she will have to “do everything myself?”. The video goes on to make the claim that its Local Property Experts can “manage every aspect of your sales wherever and whenever you need – we think that’s far better than then them twiddling their thumbs in an office on the high street”. Designed to allay consumer fears about using Purplebricks, the video is believed to have been produced by Snap, the same agency that cooked up the company’s ‘commisery’ TV campaign. Three other videos have been filmed for the ‘series’ including ‘how can you charge so little’, ‘why would I sell with someone new’ and ‘why would you get me the best price’. Investor worries The videos have done little to allay City investor worries about Purplebricks. Its share price has yet to recover from the report published recently…
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Purplebricks is ignoring advertising watchdog’s ruling over fee transparency, claims CIELA
Purplebricks is to be investigated by the Advertising Standards Authority (ASA) over a ruling the watchdog published last year which upheld a complaint by the Charter for Independent Estates and Lettings Agents (CIELA) about its TV advertising. CIELA claims that Purplebricks is still not being clear about its upfront fee structure, despite the ASA saying it should do when, in October, the ASA found that Purplebricks’ ‘commisery’ TV ads had breached its Code of Broadcast Advertising. In the comments, the ASA said Purplebricks must “ensure that when making a comparison to other fee models in their ads, they made it clear that their flat fee was always payable.” Last week CIELA made a further complaint to the ASA, pointing out that several of Purplebricks’ online adverts made the same claims, and had not been amended to reflect the ASA’s earlier decision. CIELA has been told by the ASA that its complaint will not be taken forward. In an email to CIELA, it has said that “having considered your complaint, we have determined that it is not necessary to reinvestigate the issue, in light of the previous ruling. “Instead, we will refer this matter directly to our Compliance team to take…
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Purplebricks shares continue freefall despite robust radio defence of sales by new UK CEO
The Purplebricks share price has continued to tumble today dropping this morning by 10% to £3.74p a share, down from its all-time high of £5.13p. This follows a price crash late last week during which its share price dropped by nearly 15%, prompted in part – it is claimed by Purplebricks – by a market report from investment analyst Jefferies that claimed it is selling fewer properties than the 78% sales rate it currently promotes. The company’s new CEO Lee Wainwright (pictured, below) went public over the weekend and appeared on a BBC5Live radio programme, during which he called into question the basis of Jefferies report, saying: “Purplebricks wouldn’t be growing at the rate it is if we were only selling half the properties we list”. “The reason we’re capturing the imagination of consumers is that the old way [isn’t] working,” he added. “I’ve been in the estate agency for 26 years, I’ve worked on the high street, I know that the performance of Purplebricks is incredible compared to the high street estate agencies. “Customers want a better way, they want more transparency on fees and the convenience of 24-hour technology and they want a cost-effective way of doing estate…
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AllAgents asks reviewers to prove their posts are not ‘fake’
Glasgow-based reviews website allAgents has taken the “unprecedented step” of asking people posting on its site to prove they are genuine customers of an agent before their comments can go live. The site, which has been involved in a prolonged battle with Purplebricks over claims by the agent that some negative posts on allAgents are ‘fake’, says it has made the move “due to previous threats of legal action” by Purplebricks. “They are not fake, they are genuine customer concerns,” a statement released by allAgents over the weekend says. AllAgents claims it is now the only review site in the UK to ask customers for proof of this kind prior to posts going live. The announcement is the culmination of nearly six months of wrangling between the two firms after Purplebricks asked the site to take down the ‘fake’ negative reviews. The website declined to do so. In December talks between it and Purplebricks broke down after allAgents’ Director of Business Development said the hybrid agent’s “business ethics are not in line with our own”. one-star reviews Of the 11 reviews posted on the reviews website since the New Year, all bar one award Purplebricks one star out of five…
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Purplebricks hits back at analyst’s report that it only sells half of listed properties.
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,…
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Purplebricks launches in New York, expands Los Angeles operation
Purplebricks has announced to the London Stock Exchange that it is to launch in New York in Spring this year, the second area it has targeted since establishing its US arm last year. CEO Michael Bruce has also revealed that the company has this month also expanded its existing Los Angeles operation, moving into neighbouring San Diego, Sacramento and Fresno. The company says it is targeting the New York area because it has some of the fattest ‘standard’ commission rates in the US at 7%, a high average sale value of $561,000 and a very busy market – transaction rates are double that anywhere else in the States. Michael Bruce (pictured, left), who recently stepped down as UK CEO to grapple with the company’s global expansion, says: “It is a sign of confidence in the potential of the US business that we are today announcing our expansion to cover both the East and West coast, with our planned entry into the New York market. “With higher than average rates of commission and transaction volumes, New York was the natural first move on the East Coast for Purplebricks. Referring to US CEO Eric Eckardt’s (pictured, right) previous form in the New York property market including…
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Michael Bruce steps aside to let former Countrywide exec run Purplebricks UK operation
Former Countrywide divisional manager Lee Wainright has been made CEO of Purplebricks’ UK operation as the pressures of running a global empire bear down on the company’s founder and previous CEO Michael Bruce (pictured, right). Lee has been the company’s operational chief since March last year and before that enjoyed a long career at Countrywide, which he joined as a school leaver and during a 26-year stint there rose to be a Divisional Managing Director, a post he held for 12 years. During his short tenure at Purplebricks Lee (pictured, left) has overseen the growth of its operational and customer service teams, a key plank in its attempt to persuade vendors and landlords that it is a ‘proper estate agent’ as the current ‘wedding’ TV advert proclaims. This has included Lee’s direct involvement in training up some 300 Local Property Experts, the launch of its new ‘concierge’ style customer support service based in Derbyshire, and the launch of both a Post Sales Support and Conveyancing Sales team. As well as promoting Lee to CEO, Purplebricks has recruited a former British Gas call centre professional, Sophie Fox (pictured, below), to run the Purplebricks telephone lines. “We are very fortunate to have…
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Purplebricks vs allAgents – who is the real ‘rogue one’ in this one-star war?
Agent reviews website allAgents has come out fighting after Purplebricks yesterday said its experience of the site had “been very poor”. The hybrid agency went on to say that “we have never sought or had any commercial agreement with allAgents and we have no desire to work with them in the future”. But the reviews website, which has been in dispute with Purplebricks since at least September after the agency challenged whether negative reviews on its website were true or not, is not taking the criticism lying down. allAgents says it welcomes Purplebricks statement that “they don’t want to work with the UK’s largest independent review website for the property industry” because the only people allAgents wants to work with “are consumers”. “When it comes to the 300,000 reviews on our site, we don’t want to work with Purplebricks, or any agent for that matter,” says allAgents director Martin McKenzie (pictured, left). “We work for the consumer. Unlike other sites, we have no commercial agreements with agents, which is why they are a fair reflection of consumers’ experiences – good and bad. “We’ re a business of course, and agents pay us for such services as branding and property listing…
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Purplebricks Australia boss cashes in shares worth £146,000
The CEO of Purplebricks Australia has cashed in shares worth £146,000 after exercising his share options in the company, it has been revealed, just after the one-year anniversary of the country launch. Ryan Dinsdale (pictured, right), who joined Purplebricks in June 2016 following time spent at Virgin Money, Telstra and an online broker in Australia, has led the Purplebricks operation in Oz to recent success including, so far, sales totalling property worth $1 billion AUS. His team earlier this week reported revenues of £6.8 million and a gross profit of £3.6 million, and an average income per instruction of $5,282 AUD. He has also increased the number of Local Property Experts working for Purplebricks in Australia to 105, the company’s latest interim trading statement says. Austrian market share It also says that Australia has been more successful than the UK by one measure – market share – which is now higher than the UK 74% of the online market. At the same time Ryan sold his shares, Purplebricks revealed that a further 1.17 million ordinary share options have been exercised by “certain employees”, indicating that some original founding but non director-level staff at the company have also cashed in shares…
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