Purplebricks will bag 5.7% of all instructions by 2023, predicts City advisory firm

first_imgCity investment advisory firm Zeus Capital has predicted that Purplebricks will increase its market share from 5% to 5.7% over the next two years and eventually capture 7% of the overall market.This predicted share is based on the company’s slice of property sales instructions, not sales, which the agency never publishes.Zeus Capital says the company was instructed by 53,680 vendors last year, a figure it expects to rise to 69,000 in 2023, which means it will take some 15,320 additional instructions off its traditional rivals over the next two years.Robin Savage (pictured), Zeus Capital’s property industry expert research analyst, also makes some astounding claims on behalf of Purplebricks.This includes that the agency has the largest market share in ‘many property markets’ and that in many areas of the UK it’s share of instructions is running at 10% or more.Savage says the company’s biggest challenge is to make inroads into the more upmarket areas of the UK where Purplebricks is virtually non-existent – vendors of expensive don’t like the agency’s downmarket reputation.But Savage also warns that future growth for Purplebricks, which is due to turn over £100m in two years’ time if Savage’s forecasts come true, will need to ‘adapt its pricing proposition’.This, as other commentators have highlighted, is a polite way of saying the agency will have embrace traditional estate agency fees and lessen its reliance on ‘being cheap’.“Purplebricks is exceptionally well funded for an estate agency with £70m in the bank, no debt and, it is expected 150+ instruction rolling in every day,” says Savage.Read more about Purplebricks’ growing market share. March 18, 2021Nigel Lewis3 commentsAndrew Stanton, CEO Proptech-PR Real Estate Influencer & Journalist CEO Proptech-PR Real Estate Influencer & Journalist 18th March 2021 at 10:42 amGaining market share – does not mean it is a going concern, take Uber etc, Purplebricks is a cash guzzler that never makes profit. (Market share) Turnover is vanity – profit is sanity. Better to be a nice little village agent turning over 600k with 280k costs, that is a succesful business, not relying on rounds of external funding.The figures do not lie, annual cut off is 30th of April for Purplebricks accounts, in 2016, they lost 11.9M, 2017 they lost 3.01M, 2018 they lost 30.08M, 2019 they lost 54.9M and in 2020 – up to 30th of April they lost 19.2M.Against revenues (cash in of) 18.6M – 2016, 46.7M in 2017, 87.79M in 2018, 113.8M in 2019 and 111.10 M in 2020.Given this includes about 18M plus of revenue for houses that were listed and did not sell, in the past two years respectively – the figures on that basis would be far worse, try adding 18M to the loss figures quoted earlier. Also, I see they are going back to their ‘no commission slogan’ that really is a great USP. 🙈Log in to ReplyChris Arnold, andsothestorybegan andsothestorybegan 18th March 2021 at 10:24 amPurplebricks will take market share from those ‘bottom-feeders’ simply because of brand awareness. There are vendors that will choose any agency regardless of competence, so long as the business model isn’t entirely broken. But I seriously question whether it will ever make in-roads into the mid/high end sector, where relationships matter more than brand awareness.Purplebricks’ latest attempt to put the focus on their ‘local experts’ might help, but the cynic in me says that the message won’t be anything radically different. Just some more meaningless corporate strap-lines, designed to convince and convert.The market share enjoyed by Purplebricks isn’t a result of their disruption, or their marketing prowess – it’s the result of their competitors’ inability to share a crystal clear vision of Who they are and Why they are different. Creating market share in a commodity market only requires deep pockets – nothing else.Log in to ReplyAndrew Stanton, CEO Proptech-PR Real Estate Influencer & Journalist CEO Proptech-PR Real Estate Influencer & Journalist 18th March 2021 at 8:21 amSoon be April, let us see if for the first time ever Purplebricks turns a profit. And moving forward if it changes its fee model, and does not charge per listing regardless of agreeing a sale, that is £18M plus a year disapperaing from its revenue stream, so that £70M in the bank will not last long having to support that cash burn. Good to see they are still relying on the agent who does not charge commission – as their strapline for those lovely expensive TV adverts, again if they flip their model – where does their one USP go …Log in to ReplyWhat’s your opinion? Cancel replyYou must be logged in to post a comment.Please note: This is a site for professional discussion. Comments will carry your full name and company.This site uses Akismet to reduce spam. Learn how your comment data is processed.Related articles BREAKING: Evictions paperwork must now include ‘breathing space’ scheme details30th April 2021 City dwellers most satisfied with where they live30th April 2021 Hong Kong remains most expensive city to rent with London in 4th place30th April 2021 Home » News » Agencies & People » Purplebricks will bag 5.7% of all instructions by 2023, predicts City advisory firm previous nextAgencies & PeoplePurplebricks will bag 5.7% of all instructions by 2023, predicts City advisory firmZeus Capital analyst claims agency is the ‘No.1’ in many areas of the UK and is on track to eventually hold 7% of the whole property market.Nigel Lewis18th March 20213 Comments1,116 Viewslast_img read more