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Purplebricks estate agents sells for £1

Strike has taken on all Purplebrick’s debt in a rescue deal, after share prices for Purplebricks plummeted to only 1 pence

A photo of Grace Lynch, the author

By Grace Lynch

Published on: 19 May 2023

4 min read

Purplebricks estate agents sells for £1

Online estate agents Purplebricks has been sold for just £1. Purplebricks were previously valued at £1.4billion during their most successful period. Following significant financial troubles, they have been bought out by rival online estate agents Strike.

Who are Purplebricks?

Purplebricks was established in 2014, as a solely online based estate agent. This innovative approach was intended to give buyers and sellers more freedom. With online access, it was possible to schedule property viewings, negotiate sales and more 24/7 from the comfort of their own home.

Starting with only 30 local agents, Purplebricks had expanded across the UK by the end of November 2015. They state on their website that they are one of the best-known estate agent brands, with brand awareness of 93%.

Purplebricks reviews – Rated 3.9 out of 5.0 stars on Trust Pilot (90,861 reviews)

How does Purplebricks work?

Purple bricks work by selling your home online, with 24/7 access to support. Selling your home via Purplebricks is intended to be very simple and straightforward:

  1. You book a free property valuation with a local property expert (either remote or in person)
  2. You receive a full valuation report for your property
  3. You receive instructions for how to sell with Purplebricks (They state fees as little as £1,349 which can be paid upfront, within 10 months, or after your property sells)
  4. Purplebricks will create an advert (following a photography appointment) and list your property on sites such as Zoopla, Rightmove (plus their own website) and place a For Sale sign for you.
  5. You manage your viewings online (you can do the viewings yourself or have a Purplebricks agent conduct them for you)
  6. Your sale is completed and you can accept offers online. You are then guided through the conveyancing process.

Strike estate agents (founded as HouseSimple in 2007) are another online based estate agents. They rebranded as Strike back in 2020 and are backed by investors in companies such as Channel 4, Direct Line and GoCompare.

Strike sells themselves as being sick of the ‘high fees and pointless jargon’, intending to create a simple process for buyers and sellers. Strike are an online agent with generally positive reviews and no estate agent fees attached to their services.

Strike won Online Estate Agent of the Year 2021 and have continued to grow since then. Strike claims to have sold £5.02billion worth of property since their business launched, with 628 viewings requested every day.

Strike reviews – Rated 4.4 out of 5.0 stars on Trust Pilot (21,583 reviews)

How does Strike estate agents work?

Strike doesn’t charge fixed fees for selling with them, unlike when a house sells with traditional estate agents. They will sell your home for free if you wish, with 40% of customers choosing this option.

They state 3 simple steps for selling with Strike:

  1. They value your home
  2. They work to get you the best offer from potential buyers
  3. They manage your sale until completion (with a dedicated support team)

Strike estate agents make a profit from selling optional extras such as:

  • Mortgage advice (pricing varies)
  • Marketing boosts (you can take your own photos or pay from £699 up for premium listings and professional photos)
  • Accompanied viewings (you can skip this if you want to show your property yourself, if not hosted viewings will cost upwards of £799)
  • Moving services (pricing varies)

What will happen with Purplebricks now?

Purplebricks has taken only £1 in profit from the sale of their business, as Strike has assumed all debts owed by Purplebricks. Purplebricks has retained £5.5 million in cash that will be split amongst shareholders once the sale is complete.

Investors were warned at the start of May that Purplebricks was likely to run out of money due to a lower number of properties on its books. This left revenue in a very precarious position and caused company shares to drop massively – ending up valued at just 1p.

At the height of success in 2017, Purplebricks shares were £5 each (£1.4billion value overall). In the last year alone, shares have dropped by 94p. This follows several financial missteps including a mistake with lettings laws that cost the business £9million.

Following this period of financial difficulty, there was no option but to accept the offer of £1 from Strike. Chief executive of Purplebricks Helena Marston has stated this was the only way to ‘secure a solvent outcome’ and protect the future of the brand.

More home and mortgage news

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Resources

Statista – High street vs Online estate agents market share 2022

Homeowners Alliance – Best Online Estate Agents in 2023

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