Online estate agent Purplebricks swings to £12.9m loss over last six months as it blames 'substantial' shortage of new listings
- Purplebricks made £12.9 million loss before tax in six months to end of October
- The online estate agent made a 4.3 million profit in the same period a year earlier
- But instructions to sell homes dropped 38% following a boom during pandemic
- Company shares rose 2.7% today but are down by 78% from this time last year
Online estate agent Purplebricks has suffered a £12.9million half-year loss as the business lost market share to its rivals.
Purplebricks had enjoyed a boom in sales during much of the pandemic, which was encouraged by the stamp duty holiday in July 2020 and urban dwellers working from home - who were eager for green space.
But last November, it was reported Purplebricks' shares were falling after a 38 per cent drop in instructions to sell homes. This has partly been attributed to the end of the stamp duty holiday, as well as a shortage in new listings and the prospect of rising interest rates.
Today, Purplebricks announced the £12.9million pound loss before tax in the six months leading to the end of October, compared to a 4.3 million profit in the same period a year earlier.
Revenue meanwhile dipped 7 per cent to £41.3 million, the business said.
Despite this setback, due to rising housing costs, the amount of revenue Purplebricks made per instruction rose 15 per cent to £1,642.
Trading in the six months had been 'challenging' for Purplebricks as the number of homes it had been instructed to sell 'slowed significantly' following a boom during the pandemic
'The first half was undoubtedly challenging, with the implementation of a major change to our operating model coinciding with the UK property market experiencing a substantial fall in new instructions,' said chief executive Vic Darvey.
'This dynamic led to a disappointing financial performance but we are confident that we now have the right levers in place to drive a stronger financial performance going forward.'
The publication of the company's results for the half year had been delayed by over a month after it discovered a potentially costly process error in how it communicated to tenants.
Its lettings arm had not properly explained to tenants that their deposits had been placed in a protection scheme.
Share this article
This error promises to prove costly for the business. However, today Purplebricks revealed that it may not be as expensive as first thought.
It originally thought that tenants would claim back between £2 million and £9 million under the Housing Act. It now predicts claims will reach just £3.6 million.
Shares in the company rose 2.7 per cent today, but are down by 78 per cent overall compared to a year ago.
'Things have improved in January, we have seen improving market supply. But we’re still seeing significant demand outweighing supply,' Mr Darvey told the Financial Times. 'I think there’s a way to go.'
Last November, it was reported that Purplebricks' share price was falling as the online estate agent was running out of homes to sell.
Trading in the six months to the end of October was reported to be 'challenging' as the number of homes Purplebricks were instructed to sell 'slowed significantly' following a boom during the pandemic.
Estate agents had benefited during Covid-19 as a cut to stamp duty, low mortgage rates and a desire for gardens from city dwellers working from home sparked an explosion in the market.
However, housing stock was vastly reduced as a result of the buying boom, which alongside the end of the stamp duty holiday and the prospect of interest rate rises, left new sellers hesitant about putting their properties on the market.
Most watched News videos
- Eldery couple who hurled vile racist abuse at NHS nurse jailed
- Petsitters caught kicking dog they were paid £1,400 to look after
- Obscene moment baseball fan is caught groping female companion
- Keir Starmer let rip at Sir Lindsay Hoyle after he admonished him
- British tourists hurl sickening abuse at Israelis in Vietnam
- Military Land Rover flips throwing driver out as motorist jailed
- Otter chases family though marina after attacking young child
- Starmer faces calls to quit as No.10 confirms security failures
- Iran propaganda video trolls Trump showing him thrown into Hell
- Toddler bolts toward Phoenix intersection before saved by APS worker
- Bald man in leopard print leotard spotted riding UNICYCLE
- The Big Question: Has Harry really moved on from the Royals?
