Two complaints have been upheld by the advertising watchdog against HouseSimple – which last week won Online Estate Agent of the Year at the Negotiator awards.
A complainant raised two issues to the Advertising Standards Authority relating to a poster on a London tube train.
It said: “… you could just pay our usual fee of £495 and save thousands instead.* Not only do we potentially save our average London client £18,764** in fees, we’re also [X]% more likely to sell a property than a high street agent – and we’re three times faster at selling it++”.
A footnote stated “** Offer is based on an average Foxtons fee of 2.4% +vat (2.88% inc vat) (Based on Average Foxtons fee for 2014, Peel Hunt Market Report) and is available to clients whose properties are sold and completed at £377,000 or above … ++ Based on data from Rightmove.co.uk”
The complainant queried whether the claims to potentially save the average London client £18,764 in fees, and being three times faster at selling, could be substantiated.
HouseSimple supplied the ASA with a list of London properties it had sold between November last year and June this year. The average fee was £698.
The average asking price was £675,767. HouseSimple had applied the average Foxtons fee of 2.4% plus VAT, calculating this at £19,462. The difference between this figure and theirs was £18,764.
HouseSimple had used Foxtons’ fees for comparison because Foxtons was its most identifiable competitor in London.
HouseSimple also provided an article by the Home Owners Alliance which stated that estate agents’ fees ranged from 0.75% to 3.5%.
On the claim that it was three times faster at selling than a high street agent, HouseSimple said its average selling time was 25 days between October and April. Rightmove’s house price index for February had said the average time to sell across the UK was 79 days.
However, the ASA upheld both complaints.
It said HouseSimple had not proved that Foxtons’ fees were representative of fees charged by London agents. The information provided on the Home Owners Alliance website did not state how the range of 0.75% to 3.5% was calculated, whether it applied to London or nationally, how recent the figures were, and whether they included VAT.
The ASA said that HouseSimple needed to demonstrate that at least 10% of its clients had paid £18,764 less than they would have done had they used a high street agent. No such calculation had been provided.
The ASA also upheld the complaint regarding HouseSimple’s claim to sell houses three times faster than high street agents.
HouseSimple said its average sale time was 25 days, which was three times faster than the UK average given by Rightmove of 79 days. However, Rightmove had also quoted a London-specific figure of 58 days.
Other data supplied by HouseSimple, from the search engine Home, showed an average selling time of 120 days, but this related only to south-west London.
HouseSimple was told not to repeat the advert again and to hold documentary evidence to substantiate any claims made.
Earlier this year, HouseSimple received a major boost with a £13m injection from Carphone Warehouse founder Sir Charles Dunstone and his business partner Roger Taylor.