Purplebricks sells houses for a fixed fee but there have been compliance problems in its lettings business
(Picture: PurpleBricks)Purplebricks has said the number of claims related to failures within its lettings business is so far limited as it reported its first annual loss since 2019 in results its chief executive said were “not good enough”.
The UK’s biggest online estate agency has set aside £3.6 million pounds for claims relating to “process failures” in its lettings division, where it failed to meet legal requirements to tell tenants their deposits were held in a national protection scheme.
Helena Marston, chief executive, told the Standard that ‘to date, we have only had 15 claims, and we really don’t expect to see that significantly increase over the next few years ... If we still have a very low number of claims at the end of this financial year, our auditors will find comfort in reducing the provision.”
Purplebricks reported a loss of £42 million pounds from “total operations”, from a profit of £6.8 million last year.
“Over the last couple of years we lost our way,” conceded Marston. “Our marketing campaigns haven’t cut through and we haven’t had the control we needed over the sales field. My number one priority leading into this year is to get the core engine working again, and that is marketing and sales.”
The AIM-listed company offers a fixed-fee service for people selling houses, which makes up the bulk of its business alongside its letting activities. It is considering to launch mortgage products in order to diversify revenue streams and is looking at introducing moving services products.
Marston said such elements would offer some protection from a wider housing market that “is looking like it is going to slow down,” in the context of rising interest rates and the soaring cost of living.
“I want investors to have confidence that not only are we getting the core engine working again, that we haven’t taken our eye off future growth.”
Shares in the company fell by over 10% to 14p in Tuesday morning trade in London.
