Low fee estate agencies, particularly Purplebricks, have once again come under fire from Spicerhaart for the downward push on fees that has worsened standards across the industry.
The joint CEO of Spicerhaart, Antony Lark, has slammed Purplebricks – and Strike – for its fees model, which he says has led to a “cheapen and weaken” service across the industry, making the experience worse for customers.
He said the low cost model offered by Strike and Purplebricks are unsustainable and do not make money. All that has happened is that everyone is now charging less for their services and the whole sector is far worse off as a result, according to Lark.
Given that Purplebricks has had a decade to make things work and still failed – under its previous owners – Lark believes the estate agency is destined to fail again under its new owners, which yesterday announced plans to sell properties for free.
Lark commented: “The news that Purplebricks will be selling homes for free comes as no surprise, considering it’s now operated by Strike. But I question how on earth they’ll make this work, when both organisations make multi-million pound losses annually and have reportedly lost significant market share over the past year.
“They have never managed to pay their way but instead have pulled down fees for a whole industry, with traditional agencies desperate to compete, resulting in far too many disgruntled customers who don’t get the service they deserve. Is that the sort of industry we want? One where we now ask our vendors to take their own photographs? What comes next?
“Estate agents need to charge what they’re worth – even more so in the current housing market. Ultimately, we need to get the best outcomes for our customers. How much longer are we going to stand by and watch others cheapen and weaken what it means to work in this fantastic and critically important industry?”
Whilst correct,
What can you do? There’s not really any enforceable law against a firm deliberately trading at a loss.
And there is nothing to stop a short sighted entity deliberately trying to put competitors under by doing so.
As a Home Mover there are numerous reasons why we’re pretty deflated by this. The old PB model was absolutely useless for customer service, keeping clients informed and on completion day nobody ever knew how to get their keys.
It was pretty naff all the way through.
Oh joy, more of that
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Whilst I have some sympathy for this view, running a medium sized estate agency, as more traditional businesses, we shouldn’t be afraid of competition from alternate business models. To my mind what matters is having a compelling service proposition, being able to articulate it effectively to our target customers and then deliver it consistently.
At Andrews we aspire to deliver market leading customer experiences, with experienced, well trained and local staff who care about going the extra mile and doing the right thing for their customers. There is ample space IMHO for more than one approach in any market and customers will make informed decisions based on what they value about the various offers available.
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Whatever people say, the trend of falling fees was already happening before Purplebricks came about and they didn’t affect it, that’s just a convenient excuse.
Now PB market share has plummeted and revenue has been cut off it’s probably time to stop giving them so much space in our heads
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I think one of the points being made is that more businesses need to work harder to show value and raise the standards that have clearly declined over the years. If we want an industry that is respected and trusted we can’t allow ourselves to chase the low fee businesses – it’s time to go in the opposite direction. Fees at 1-1.3% have become the norm and we should all work harder to add greater value, deliver a better customer experience and charge more for it.. Then you can invest more in training, education, marketing, tech etc.
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Absolutely agree, when I left sales in 2003 to concentrate on just lettings, our average sole agency fee was above 2%. Weak management, inexperienced staff and target driven boards has caused the mess we now see. Time to reverse the trend, all around us prices are rising, time for agents to do the same and get back to fair fees that reward the agents.
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I’m no Purple Brick fan but this comes from a company that encourages room lets….. glass houses and stones come to mind
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What is it Spicer Haart do that you object to? If its HMO, lots of people do that because it fits a niche usually a base away from home because of work. A single room in a share house is preferable to living in a regular guest house or hotel. Not necessarily what some people would call home but I know people happily living in a room in a house as their choice.
If it’s not that what prompted your post?
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Er – sack loads of kids buy e mail
Pay peanuts to staff
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Estate agents got lazy and failed to modernise for such a long time, purple bricks came in and shook up the industry, the industry didn’t like it.
The industry has had ten years to modernise, but hasn’t! It still the same as it’s always been! Don’t blame others for your failings.
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It didn’t shake anything up except its shareholders and customers. A disaster on all fronts. The new free model will provide the same limited quality to those who think they can get something for nothing. There is no such thing as a free lunch.
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Its shareholders who have made hundreds of millions of pounds…..
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The owners of PB made millions (the Bruce Brothers).
The Shareholders lost hundreds of millions. In terms of relative price strength the Purplebricks share price has underperformed the FTSE All Share Index by -98.22% over the past year.
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What? This is farcical. You mean the shareholders lost hundreds of millions of pounds.
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No, shareholders made lots of money! Then they made mad choices and things when south..
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I just don’t get the Strike model -I’ve tried and can’t see it ever working as a profitable business
If you want to sell your house you pay a fee to an estate agent to sell it -not hope the agent can sell them a mortgage by default .You could argue they are not in fact a house selling agent at all .what about conditional selling -been in the press a lot recently as well we know -I know it’s all in the contract but does it really hold water
I was trying to find the latest accounts to show what the last year of Strike produced -I’m guessing it’s horrible -anyone at PIE know ???
Of course the end game is a listing but after PB losing so many investors money and now calling itself the same -don’t see that happening
2-3 years and game over for this company and good riddance as far as I’m concerned
Silly idea by people who have more
Money than sense
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Imagine the board meeting where this utter blinder of an idea was agreed.
”So we have taken on a few liabilities buying our biggest competitor for quid, we haven’t really got there ourselves with the free thing and may have snorted up a few million quid trying, what shall we do with our new toy?”
I have an idea and it’s a dead cert to work, what we will do is exactly the same as we’ve been trying to do, can’t fail.
AOB? – Nope, good meeting everyone get the press release out, let Charlie D know it’s all good and won’t lose more of his money……………..its pub time”
Jonnie
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Another day and another Spicerhaart board member commenting about another estate agent business. You should focus yourself with the multi million pound losses that your business is going make again this year instead of chastising others.
£4.9m profit in 2021 followed by a £10m swing to a loss of £5.5m in 2022 under your stewardship. This loss even deeper in 2023 with many staff made redundant, again under your leadership. And yet you have the audacity to speak about another business.
More front than Blackpool.
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Totally agree ManU4Life. Why do jokers like Spicerhaart allow Purplebricks to rent their head space for free. If PB fails and goes bust, then so be it. I used to work for Spicerhaart many years ago and it was a toxic environment then as it still is now according to many people I know who work there. They have a demotivated workforce who are constantly under threat of being made redundant so maybe Antony Lark should worry solely about the mess of a business that he is supposed to be running. Rather than moan about fees being dragged down, you may as well join the lower fee brigade as the service provided by Spicerhaart is not worthy of the higher fee that you want to charge anyway.
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