Purplebricks last night on prime time TV rejected claims that it has led vendors “up the garden path”.
On the Watchdog programme on BBC1, one seller complained that their Local Property Expert was in fact based 30 miles away.
Another complained that the Purplebricks advert on TV said it would “hold her hand” but it had not. The vendor went on to sell through a high street agent.
Other parts of Watchdog focused on how sellers who deferred payment have to sign up to a credit agreement with Close Brothers, saying they had not been warned about this.
All the allegations were refuted by Purplebricks boss Michael Bruce, but he did say that if his firm was getting it wrong, the claims would be put right.
He said: “I apologise if we don’t get it 100% right.”
Bruce, who said that a ‘seismic’ change is going on in estate agency, said he would be sitting down with “our partners” Close Brothers.
An update on reaction to the item quoted reaction from two emailers, both saying they had not been aware that they were taking out loans with Close Brothers when choosing to defer their payments.
However, reviews last night made clear that vendors had understood the terms: https://twitter.com/PurplebricksUK
Meanwhile, Purplebricks shares had a tumultuous day on the stock market yesterday after the BBC radio programme You and Yours took it to task over various claims which were later raised in Watchdog.
The shares had a roller-coaster ride between a low of 392p and a high of 478.5p.
They finished the day at 438.75p, according to the London Stock Exchange, down 7%.
Last night’s Watchdog programme is likely to provoke another day of volatility for the shares today.
Last night City analyst Anthony Codling said: “Hopefully now he [Michael Bruce] will disclose how many of the homes listed by Purplebricks are actually sold by them, rather than just the fees they earn from listing the homes whether they sell or not.
“Purplebricks tell us this figure is commercially sensitive, but it is a KPI disclosed by all of the other UK estate agents we cover.”
Codling also said: “Having watched last night’s Watchdog show we reiterate our Underperform rating on Purplebricks shares.
“Our take is that the very fast pace of growth is leading to operational issues and management do not have the necessary span of control to stop its LPEs falling short.
“We appreciate that there are bad apples in every cart, but perhaps the pace of growth is leading to lower quality LPEs than are needed being recruited. The shares are counting on a lot of success in the future, however we believe that in order for Purplebricks to deliver the profits so eagerly anticipated, it needs to slow its growth and get its own house in order before seeking to sell the homes of others.
“Under questioning from BBC presenter Steph McGovern Michael Bruce commented that although it occasionally gets it wrong, Purplebricks remains the most positively reviewed estate agent in the UK. Ms McGovern questioned whether Purplebricks got things wrong ‘on occasion’, replying ‘We’re getting loads of complaints from your customers, that’s why we are following it up’.
“In our view there must have been a high volume of complaints to warrant a feature about Purplebricks on BBC’s Watchdog, a prime time show, on BBC’s flagship channel, which investigates viewers reports of problematic experiences with businesses across the UK.
“The fact that Purplebricks has made prime time UK TV does lead us to question who has correctly assessed Purplebricks model, the BBC or Trustpilot?”