UBS
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UBS downgrades Purplebricks amid worries over Oz operation and mounting losses
Investment bank also reckons the hybrid agency will have to ask investors for another £100m to cover losses at Oz and US businesses.
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Purplebricks is being caught up by rival YOPA says leading investment bank
Purplebricks’ growth is stalling and it’s being caught up by rival YOPA, say analysts at Swiss banking giant UBS It has released a research note that both highlights Purplebricks’ slowing growth and cuts the likely final market share in the UK from 15% to 12%. UBS has subsequently dropped its target price for Purplebricks from £3.05p to £2.85p. Shares in Purplebricks are currently trading at approximately £3.36p each. The bank has also reiterated its advice that investors should sell their shares in the company. As well as flagging up slowing growth for the hybrid agency, the bank says its Subject to Contact market share has been flatlining since September last year at approximately 5%. Raise questions “Given the importance of the Spring Market, we believe that this level of progress will be below management’s expectations, and will raise questions around the potential market share Purplebricks is able to achieve,” it says. UBS also says that one of its key competitors, Savills-backed YOPA, is beginning to catch up Purplebricks and now has 0.5% of the market, and that many hybrid and online agents are now offering ‘no sale, no fee’ options to customers, something Purplebricks does not. “Whilst [YOPA’s market share]…
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Latest property news
UBS reviews listed agencies
As share prices rose and fell in the post Brexit turmoil, UBS reported on estate agencies listed on the stock market, recommending ‘buy’ for Foxtons and Savills; leaving Countrywide at ‘neutral’ and suggesting ‘sell’ for Purplebricks. The Swiss bank expects UK wide housing transactions to fall 6 per cent this year and 5 per cent the next – with a 10 per cent drop in London in 2017. It believes that online-only agents are structurally altering the landscape of the sector and are gaining significant market share as consumer awareness and willingness to consider using them grows. UBS says that conventional agents most able to differentiate themselves, such as Foxtons and Savills, justify a premium price and will be most successful in withstanding the changes. The bank added that the UK referendum result added significant uncertainty, in particular for the London housing market and it has factored in a declining market in the second half of this year and 2017 within its forecasts. However, in the medium term, it sees organic growth potential at Foxtons, driven by a rollout of five to seven new branches per year. On the other hand, it sees Countrywide most at risk from this shift,…
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Housing Market
Housing bubble trouble in London
London has been named as the world’s riskiest for a housing bubble after fresh data revealed that the average price of a home in the capital had hit £500,000 in September, up 10 per cent year-on-year. UBS said last week that the property market in London has formed the world’s biggest residential property price bubble, based on property prices to incomes, and property prices to rents, which are both at record highs. The Swiss bank waned that the UBS Global Real Estate Bubble Index points to the risk of a “substantial price correction” in London’s property market should the fundamentals for residential property investment in the city deteriorate. The average price of a residential property in London reached £499,997 in September, according to the Land Registry, up 10 per cent on a year earlier. UBS said that London’s housing market is now the world’s least affordable, bar Hong Kong, which UBS ranks as the second-most likely city to have a property bubble. “Foreign demand (for homes in London) and demand deriving from safe-haven seekers largely explain current valuations. Global geopolitical risk and the high property valuations in Asian cities have helped to propel London house prices to new heights,” UBS…
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