Purplebricks’ share price dropped Wednesday afternoon to a recent low of 456.60p following a slating given to the company on BBC Radio 4 – a taster of what promises to be a substantial discussion about the firm’s performance on BBC One this evening.
On July 24 Purplebricks’ share price was riding at a high of 513p and opened this morning at 478.50. But today’s latest fall comes on the back of a lunchtime item on Radio 4’s You and Yours.
This was sharply critical of Purplebricks and included comments from Steph McGovern, the personal finance journalist who is also presenting this evening’s Watchdog programme at 8pm on BBC One.
The introduction to the Radio 4 piece claims: “The online estate agent Purplebricks is making exaggerated claims that it has already been banned from making by the advertising regulator.”
A little later McGovern says: “We have seen emails that Purplebricks has sent to existing and prospective customers repeating those claims.”
It specifically says one disputed claim – that sellers will ‘save’ £4,158 on average – has been repeated by Purplebricks’ Local Property Experts in communications with current or potential clients.
The You and Yours programme played an audio recording – to be repeated with video in this evening’s Watchdog – from a customer, John Bristow, who instructed Purplebricks and chose to defer his £1,199 fee.
“I received an email after I deferred it to say I’d entered into a credit agreement” says Bristow, who suggests he had not been informed of having entered into such a deal, which was with a separate firm called Close Brothers.
BBC Watchdog also went undercover, inviting Purplebricks LPEs to five different properties around the UK; in the radio programme this afternoon it said that in three of those cases the expert failed to mention that the sellers would be entering into a credit agreement with a separate company.
Although the LPEs were praised on You and Yours for having good knowledge of their local areas, McGovern told listeners that at least one appeared to have exaggerated the number of homes they had sold.
Purplebricks co-founder Michael Bruce, interviewed on the telephone by You and Yours presenter Winifred Robinson, insisted that the disputed £4,158 claim had been removed from “over a thousand different places” after the Advertising Standards Authority ruling.
He claimed he had within the previous 24 hours been sent a copy of an email showing the claim still being made, and said that this claim was also removed immediately afterwards.
He said that the LPE who claimed to be listing up to 25 properties a month could have been referring simply to the number of listings made by himself and colleagues.
In terms of agreements entered into with Close Brothers, Bruce said all vendors were made well aware of this by LPEs and on-screen at the time of signing up to the deals.
Asked whether this was really a loan by another name, Bruce called it “an unregulated facility agreement” and insisted that The Property Ombudsman was aware of the arrangement, and how it was made clear to vendors on the Purplebricks website.
Watchdog is on BBC One Weddnesday evening at 8pm.
Mortgages – Find cheapest rates from 0.98%