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1. Based on the Purplebricks annualised number of fee paying customers. 2. Period week ending 5 June 2016.
Purplebricks was conceived by brothers Michael and Kenny Bruce from their experience in running a successful traditional estate agency in the Midlands.
The brothers realised that with the proliferation of the internet and widespread acceptance of transacting online, customers were interacting much less with high street branches.
This presented the opportunity for the development of a new lower cost model without the need for a branch network yet retaining the local expertise and personal service that an agent offers.
From October 2011 Michael and Kenny started work on the Purplebricks proposition full-time, putting in place the technology, infrastructure and people to build towards a successful launch, which took place in April 2014. The technology platform sits at the core of the business and was designed and built in-house to provide a more convenient, transparent and cost effective process for selling, buying and letting a property.
Purplebricks now has a substantial national footprint. From its launch along the South Coast of England in April 2014 it has expanded across the country, most recently entering London and Scotland and entered the lettings market.
As of April 2016 the Directors estimate that the Company has become the third largest estate agency in the UK by fee paying customers at its current run-rate of instructions.
Prior to its fundraising on AIM, the business has been funded by the Bruce brothers together with a range of investors including Paul Pindar, DN Capital and funds managed by Woodford Investment Management Ltd.
Purplebricks successfully floated on AIM in December 2015 at 100p per ordinary share. Since then the Company has expanded its market share considerably and has announced its launch into the £3.3bn Australian estate agent market.
It is estimated that annual UK estate agency fees amount to over £4.4bn. Purplebricks’ strategy is to build upon its market leading hybrid proposition and increase Purplebricks’ share of the UK estate agency market for both sales and lettings.
The attainment of the strategy is based on the following key pillars of the Purplebricks offer:
Traditional estate agents charge a fee on sales typically within the range of 1 to 3% of the sale price. By contrast, the average Purplebricks’ fee is £1,080 (inc VAT) as at May 2016.
Unlike other online operators Purplebricks operates a hybrid model, with a growing number of LPEs (205 as at 30 April 2016). The LPEs have detailed knowledge of their respective areas, visit the properties and provide valuations. Once instructed the LPEs provide support, advice and assistance throughout the sales process.
The technology enables interaction 24 hours a day. Customers can instantly know what is happening with their property, they can book valuations, arrange viewings, see feedback from viewings, offers can be made and sales can be agreed, customers can get performance reports and can contact Purplebricks 24 hours a day. We’re open when most other Estate Agents are asleep.
Purplebricks has spent over five years developing and building its technology and has a team of developers who work on new features, maintenance and security. Purplebricks intends to continue to develop its offering, introducing new versions of its platform and assessing new and improved ways of accessing and operating the process of selling, buying and letting property.
Purplebricks launched its sellers' App in early 2016 and has plans to launch a buyers' App in the coming months.
Purplebricks aims to increase brand awareness among UK homeowners, landlords, buyers and sellers as a trusted and effective alternative to high street agents and online competitors. Customer satisfaction and referral is critical to Purplebricks’ growth and the service is rated excellent by review website Trustpilot A/S (rated 9.3) with 8,103 reviews from customers.
Purplebricks has a competitive and transparent, flat fee pricing structure of £849 inc. VAT for a sale anywhere in the UK other than certain defined London postcodes, where there is a charge of £1,199 inc. VAT. There are additional charges if the customer wants Purplebricks to undertake the viewings on their behalf, if they require an energy performance certificate, or a Rightmove premium display. The Company’s additional sources of revenue currently comprise fees from conveyancing, mortgage referrals and insurance.
The average Purplebricks’ fee including all other sources of income is £1,080 (plus VAT) as at May 2016.
The customer can choose to pay upfront on instruction or they can delay the payment (at no additional cost) until the earlier of the sale of the property or ten months from instruction. The deferred payment is financed by Close Brothers Financial. Purplebricks is paid by Close Brothers the next working day. If a customer wishes to defer payment, they are required to use Purplebricks conveyancing services for the sale.
The cost structure of the business is different to that of a traditional estate agent. First, the hybrid model does not require an extensive, fixed cost, leased, high street estate. Secondly, the LPEs typically operate under licence (89%) with fees payable upon instruction, rather than as an employee (11%) with the ability to employ or contract sub-licencees to grow their business. The marketing budget is in alignment with the strategy of consistent presence in the media such as television, and aims not only to build awareness but also to help maintain and extend the Company’s position as the market leader in the online sector.
This statement is made on behalf of Purplebricks Group Plc pursuant to the Modern Slavery Act 2015 (‘the Act’) and comprises our slavery and human trafficking statement.
Purplebricks Group is a Public Limited Company (PLC) (‘Purplebricks’) registered in England (registered number 08047368).
Purplebricks provides services in the UK and through its direct subsidiaries. Internationally, services are provided by a network of separate and independent entities or practices offering professional, commercial and residential property services. These firms, Purplebricks Inc. and Purplebricks Australia PTY Ltd together with Purplebricks, are known as 'the Purplebricks global network'. For the purposes of the Act, only Purplebricks meets the threshold requiring an annual statement to be produced.
Purplebricks is committed to ensuring that there is no slavery or human trafficking in our business nor in our supply chain. We work to provide our customers with a high level of service and expect our supplier to also meet our level of professional standards.
This Policy Statement reflects Purplebricks’ commitment to acting with integrity and ethically through all of our business relationships. It also reflects the commitment we have in implementing and enforcing correct and effective processes which control and ensure that Slavery and Human Trafficking is not taking place through our supply chain and Company.
Purplebricks Group Plc is committed to taking all appropriate steps to ensure that slavery or human trafficking is not taking place and will review the existing business and supply chains for the risks of slavery and human trafficking. This will include reviewing (as needed) our procurement processes; and sharing relevant information as part of awareness training to relevant parts of our business.
Purplebricks will not support or deal with any business knowingly involved in slavery or human trafficking.
Purplebricks prides itself on operating a zero tolerance policy towards Slavery and Human Trafficking. All employees that are responsible for procuring external goods and services including all head office staff, regional office directors and heads of department are dedicated to ensuring that our suppliers always adhere to the same ethos and support us in complying with the Modern Slavery Act 2015.
All staff listed above are required to establish that they are dealing with trusted suppliers and to identify and discuss the potential risks related with any new supply chains. A copy of this statement will be provided to all businesses/ entities within the Purplebricks supply chain.
Purplebricks currently have onboarding and auditing practices in place for checking that all employees have the right to work in the UK. Our recruitment methods are continually reviewed to ensure transparency and consistency. Training will be provided to management when needed.
This policy has been shared with our Purplebricks global network which includes Purplebricks Inc. and Purplebricks Australia PTY Ltd and will be reviewed in October 2018.
The Chief Financial Officer, James Davies, is responsible for this statement.
Should an employee have any concerns in regards to a breach of our Policy, the Legislation or a likely risk of a breach they must inform the HR Department by calling 0121 794 3934 or emailing HR@purplebricks.com.
Please note that employees can also report instances via the Grievance Policy.