‘Purplebricks’ sounds rather like an infant’s toy doesn’t it? So who could have imagined that such an innocuous-sounding name would revolutionise estate agency in much the same way as EasyJet has done for flying and Amazon for retail sales?
The early years of Purplebricks have been something of a rollercoaster ride compared to the aforementioned examples. Launched in 2012 as a new concept – a national, exclusively online estate agency – and listed on Aim in 2015, the company later expanded into the US, Canada and Australia. However the UK operation did not produce a profit until 2016 and that was a modest £300,000, although this has risen to a reported £5.7 million for the first half of the 2019 financial reporting year.
Along the way there have been spats with BBC Watchdog and websites Trust Pilot and AllAgentsUK over the veracity of online reviews of its services. Earlier this year it announced closure of the American and Australian operations. When the Stock Exchange opened yesterday shares were trading at 105p, compared to a peak of more than 500p two years ago.
For all that, the influence of Purplebricks on the estate agency market has been enormous. It has diversified the sector into ways of working previously unknown which – I believe – has rippled out as an improved and more efficient service to the public. And where Purplebricks has led, others have followed – including, I have to admit, Yours Truly.
£7 million funding
Some of you may have read last week that DJ Alexander’s Apropos online tenant and landlord management system had negotiated a new funding package worth £7 million with Santander UK. This will enable Apropos to expand its internet-based partnerships with local property experts across Scotland, England and Wales.
But truth be told, to me the thought of embarking on such a journey as recently as 2012, when Purplebricks was founded, would have seemed not only impossible but irrelevant. Unlike Paul on the road to Damascus, my conversion to the internet way of doing things has been a slow process and it was the emergence of Purplebricks that made me sit up and take notice.
Even by the time booking flights and holidays online had become established practice among the general public, digital business still accounted for a tiny part of my company’s activities. And I believed this was the way things would continue, with the internet a niche facility relevant only to those who lived in rural areas and for whom accessing high street showrooms was a bit of a bind.
The facts speak for themselves
After taking stock, I concluded the future lay in a hybrid provision, part-showroom/part-internet, in the way that retailers like Marks & Spencer and John Lewis now operate. But the speed and convenience the web provided for our client base (plus the influence of my co-director, John Alexander, always a bit more tech-savvy than myself) soon made it clear that a wholly online operation was, indeed, the way ahead.
Respected competitors may disagree with the sentiment that High Street estate agency will go the way of the horse-bus and the traditionalist in me partly wishes they were right. But the facts speak for themselves.
Latest research reports ten estate agents are going bust across the UK every week. Should the trend continue, the total will reach 498 for the year – the highest annual figure since 2014. The Scottish figure is likely to be 30 for the year, almost double last year’s total of 17.
Clearly, several factors will have led to these closures but in some of them, at least, the cost of maintaining an on-street presence, which increasing numbers of the public no longer require, must have contributed.
People under the age of 40, who run their lives through their phones, tablets and computers, would never consider physically entering an estate agency showroom for information which can be so easily accessed online. And as they are the future, so the market must shift to offer the service they deserve.
- David Alexander is MD of DJ Alexander