Purplebricks; What is really going on?

This post has now moved to our new blog address


24 thoughts on “Purplebricks; What is really going on?

  1. Hi Andy. By all means. Thank you. Purplebricks – What is really going on?
    Purplebricks is one of a raft of new-breed estate agency companies making some bold and questionable claims in the property market at present but how many of these claims stand close scrutiny and are they even trading within the law? Over the years there have been many businesses who have seen what they believed to […]

  2. Hi John.
    If I were setting out on a new venture with the support and backing of a PLC with associated multi-million pound TV, property portal, press and internet campaign I would expect my chances to be in a successful, profitable business after three years to be better than for almost any ‘hot-start’ franchisee, let alone after just a few months.

    The turnover appears to be well into double figures which suggests that either the model is fundamentally flawed or that PB are possibly failing in their duty of care in the recruitment of and to new franchisees. It doesn’t appear that Purplebricks are members of the British Franchise Association however, their code of ethics makes interesting reading http://www.thebfa.org/about-bfa/code-of-ethics

  3. It is very clear from Purplebricks’ own service agreement that LPEs’ are indeed franchisees John abd specifically mention resolving any disputes using the British Franchise Agreements code of conduct. There is little concrete information as Purplebricks are very good at ensuring there is very little concrete information to work on. Hence the article.

  4. Jon, I think it unlikely that we will agree however, to answer your questions/ statements please consider the following.

    Purplebricks entered the property market rubishing a particular business model and many, many agents by making a number of claims and statements, some of which have already been shown to be misleading, not based on sound data or, either knowingly false or naive to the point of incredulity. It is not unreasonable to challenge those claims. There are also legitimate questions over the legality of the way it has operated and continues to operate in terms of redress, money laundering, data protection and employment law.

    I don’t expect a competitor to tell me it’s business however, when a competitor makes statements claims about how well it is doing or the savings it allegedly offers, I expect that competitor to justify them (incidentally, as do trading standards) with clear, reliable, transparent unbiased data. PB have not to date, in my opinion, done so.

    I do expect all of my competitors to work within the law in the same way they have every right to expect me to so do. I don’t believe that’s unreasonable.

  5. Hi Chris, Great article. I would suggest it takes 10000 hours to become an ‘expert’ at anything (http://sethgodin.typepad.com/seths_blog/2008/12/10000-hours.html) I don’t think PB really thought about/cared what an ‘expert’ might be but used the word to give potential clients a misleading confidence in their offering. PB probably employ/use very few ‘experts’ in property and even less ‘local experts’ – shamefully misleading IMHO. I am not anti-online or anti-PB (they give consumers more choice) but let’s keep things factual and honest and not the current bullcrap that comes from their adverts. Tom @ Jungle Property

  6. That’s interesting John. In the version of this article that I have read the advert was placed by James Lavis who is the lpe for Bournemouth. Where abouts are based to be seeing a different advert? Also are you in any way shape or form employed, self employed a franchisee or related to the above of purple bricks? Your defence of them seems quite vercifarous.

    • Right that explains the defence. To be fair to all sides in this “debate” it’s all spin the latest advertising campaign focusing on “commisery” is mainly designed to in my opinion mislead and probably to annoy estate agents. The pricing structure can’t really be compared due to the very different nature and structure of the process. With pb you are paying them upfront for the work they due regardless of success whereas the run of the mill estate agent gets nothing until all the work is finished. As far as I am aware anyone taking all the risk in any business tends to receive a greater reward when successful. I believe that the company will fall short on its original targets but let’s face it who doesn’t ! There is also some merit in the argument over local property experts and the definition. I previously mentioned James Lavis, now no argument can be made against him being a local property expert in the Bournemouth area having worked in it for over 10 years that I know off, the storey is not the same however in the Salisbury area where I live. There have been 3 different local property experts covering Salisbury since the companies launch all 3 having never worked in Salisbury itself as estate agents. It’s all spin and as long as people are honest in their presentations then all is fair in love and war. There will be people on both sides of the battle lines that are unscrupulous but not all. Let’s face it estate agents have been tarred with the evil brush for as long as I can remember. The full accounts when published will undoubtedly make interesting reading, I wish you well with your investment.

  7. Hi Tom. Thanks for your comments. The term expert will always be a subjective one except where definitions exist such as in case-law etc. However, as in the update photograph above (17.4.17) and from other recruitment tweets/ LinkedIn adverts, many of Purplebricks people have little to no experience of estate agency yet are called experts from day one. I do not believe that the definition used by Purplebricks PLC is one that a reasonable person would take it to mean and would be very interested to see how such a claim would fare in court if brought under Consumer Protection Regulations. I believe such a case would be in the public interest.

  8. Hi There,
    Excellent article ( and comments from both sides of the debate ) on a subject that everyone with a stake in the industry should be informed about.
    I believe that the advent of so called “online” agents has taught us all a lot about the business of selling property on behalf of clients – the importance of analysing our cost base, simplifying the listing and viewing process for customers and providing real value to those that use the services of estate agents. It has also highlighted the critical requirement for genuine and credible personal and individual service from ” experts ” – be they from Purplebricks or more traditional models.
    Personally I believe that ( nearly ) all effective modern estate agents are now ” Hybrids ” to a varying degree along a wide spectrum from purely online through to a more traditional model. Ultimately the customer will decide where they wish to place their custom along that spectrum.
    One thing that does perplex me is the apparent lack of credible and independent analysis as to the true percentage of market share ( for sale and sold ) for those that at least self-identify as “online” estate agents – which may or may not include Purplebricks.
    Is anyone aware of where such statistics are available?

  9. Hi John,
    Thank you so much for that. It really is appreciated. That figure does appear to reflect the, admittedly anecdotal, information that I have for my own area In Cambridgeshire. Of course it does hugely depend on whatever definition is used in respect of an agency to be an “online” estate agent. I personally have not come across any meaningful definition which is why I would ask that agents self-identify as such for the purposes of this analysis. For me, that phrase is meaningless as nearly all estate agents are online to a lesser or greater degree as I alluded to in my post.
    Are you, or anyone, aware of a satisfactory definition?
    If 4 or 5% is accurate then it does strike me just how minimal the impact of the online agent has been to date on the overall market – despite the ( sometimes justifiable) hype and massive marketing spend.
    My own view is that the phrase “online” should be replaced with the word “budget” or “up-front payment” model as a more accurate description of this market sector. Isn’t that a description that most would accept as fair and reasonable?
    What would be your ( or anybody else’s) thoughts?

  10. Hi Simon
    Thank you for your comments and observations. There is hard verifiable data available which I had access to in writing the original article, which showed that ‘call-centre’ agents* market share has peaked despite the massive spend you mentioned. The data I had access to is now in use by some highly respected names, organisations and businesses.

    As the most recent updates to this story allude to, there are some major announcements to be broken in the near future which are highly likely to create a major upset and embarrassment in the industry.

    *I believe this is the easiest and most accurate way to differentiate them

  11. Thanks Chris,
    I respect ( as ever) your well considered view and attempt to arrive at an acceptable definition of this market sector. I think that an acceptable definition is critical in this fascinating debate.
    However, I would respectfully suggest that this is a slightly disengenuous definition as ,like it or not (and I don’t!), most of these “call centre” agents do appear to offer slightly more than just that facility – even if it is at a higher cost to the consumer than they would first advocate.
    This is why I believe that ” budget ” or ” up-front payment ” is a far more accurate description.
    Thank you for your engagement and courteous interactions on this matter. I have learnt a lot!

    • Hi John,
      I hope that you don’t mind if I join in this discussion.
      Sorry If I’ve misunderstood, but are you saying that a PB property can (sometimes) proceed to being under offer and then complete but in some circumstances they will still appear to be available for sale on Rightmove and Zoopla until it is picked up on the Land Registry and then removed some weeks or months after completion?
      Again apologies if I have misunderstood your explanation.

  12. Hi Again John,
    I do accept that there is always the possibility of human or systematic error.
    However, if a property was being advertised as “For Sale” when in fact it had completed, the estate agent would be in breach of Consumer Protection Regulations and The Property Ombudsman’s code of conduct.
    I am not necessarily suggesting that PB would be more or less likely to adapt this as an intentional policy than any other estate agent but from the apparent method ( as described by you) of monitoring and implementing these matters it does appear to me that the likelihood of such a misdescription is almost built into their modus operandi.

  13. I suggest you review a number of similar adverts and linkin profiles of ‘LPEs’ which clearly show people are moving from totally unrelated jobs and being advertised as ‘property experts’within a matter of days.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s