Purplebricks, one of the most well-known online estate agents in the United Kingdom, is being forced to sell after they are expected to lose £15 Million to £20 Million this year.
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Who Are Purplebricks?
The company was an online estate agent that set out to revolutionise the way property was bought and sold in the United Kingdom. Founded in 2012, they used to offer customers a fixed-fee service and the ability to buy or sell property without needing traditional estate agents or conveyancers.
The founders, Michael and Kenny Bruce from Larne County Antrim, dedicated themselves to creating lower-cost, flexible estate agents.
Purplebricks became a leader within the UK house buying and selling market due to their innovative approach, which combined technology and tailored service. Customers could book appointments at a time that suits them, and the company provided an online platform from which agents could easily access property listings and handle transactions.
Purplebricks can offer customers an affordable and convenient way to buy and sell properties by providing an upfront fee for their services. This fee is significantly lower than the traditional commission-based system and could save money on their transactions.
What’s Going On With Purplebricks?
Previously we wrote an article on the fall of online estate agents and why both Purplebricks and Strike are withering under the current economic climate.
Purplebricks has suggested that the company may be better optimised under an alternative ownership structure as they are expected to lose up to £20 million this year.
Since the company’s peak, Purplebricks has seen its share price fall 98%, with Chief Executive Helena Marston claiming, “A strategic review is now in the best interests of all shareholders.”
The massive expected loss, from £10 Million to £20 Million, is due to a failed strategy to focus on the country’s most prosperous regions.
Purplebricks has cut its revenue expectations from £7.5 million to £60 million.
The significant drop in revenue comes from the company being under consistent fire due to marketing practices, with some accusing the company of using misleading tactics to drive sales.
Which has resulted in numerous complaints and lawsuits, with the company facing steep fines and awful customer service responses.
Expert Opinion On Purplebricks
We asked Jonathan Christie, CO-Chief Executive Officer of The Property Buying Company, about his thoughts on Purplebricks looking to sell.
He said, “I think Purple Bricks has suffered from an Identity crisis which has ultimately led to its near demise. It was the first online agent to become a brand, but they have failed to capitalise on their initial success with a substandard offering and a lack of innovation.”
“You cannot hide from reviews; once bad reviews gain momentum, this will bring a company to its knees.”
“Subsequent re-branding and model changes have failed to re-invigorate the business, and it has now been overtaken by other online offerings such as Strike, which offers a sale fee-free alternative and The Property Buying Company, which can offer a range of property solutions including a quick cash purchase.”
“For me, I would advise anyone using Purplebricks to beware as the ship might have sailed for this online estate agency.”