British real estate platform Purplebricks has received 7 million pounds in financing from Neil Woodford, a UK-based fund manager. According to the firm, the capital infusion will be used for growth.
Neil Woodford, one of Britain’s highest profile fund managers, has taken a ￡7m stake in Purplebricks.com, the modern model of estate agency that combines the expertise of a Local Property Expert with a unique, 24/7, online platform at a fraction of the cost charged by high street estate agencies.
Woodford’s investment comes from the ￡2.4bn CF Woodford Equity Income fund and is the biggest non-listed investment that the fund has made. With the investment from Woodford Investment Management, Purplebricks.com will continue its plans for growth across the UK, launching in central England shortly which follows a hugely successful launch in the south earlier this year. Purplebricks is already being instructed to sell and let the homes of hundreds of customers every month.
Purplebricks.com is the brainchild of brothers Michael and Kenny Bruce who have an enviable track record of success in the industry having previously built and sold a large estate agency group and together having over 40 years of experience in the industry. Wanting to make the process easier for customers they have developed a fully interactive, around the clock estate agency model that allows people to oversee every aspect of their transaction as it happens, at the touch of a button, rather than waiting for an estate agents office to open. There is also full time dedicated advice and support from a team of highly trained and experienced Local Property Experts.
Purplebricks.com customers have access to a unique online platform which provides an effective, convenient, instant and transparent service never before seen in estate agency. Customers selling their property can book a free valuation, provided by a Purplebricks Local Property Expert and for a fixed VAT inclusive fee of ￡599, the service includes a comprehensive written description, floor plans, professional photographs and a listing on all major property portals including Rightmove, Zoopla and Prime Location. That is in stark contrast to the average UK High Street estate agent’s commission of 1.8%, which results in an average charge for the seller of over ￡5600. Landlords also benefit thanks to the Purplebricks comprehensive choice of lettings services, which cost from as little as ￡75 per month up to ￡199 for a fully managed service, saving many hundreds of pounds vs traditional letting agents’ fees.
Purplebricks has been very successful in winning customer support with very high and growing trust ratings. The company has a Net Promoter Score of +59 and 8.0 on Trustpilot, which is substantially higher than many traditional High Street agents who have a rating of less than 4.0. Properties selling on average for 99% of the asking price have demonstrated they are a strong alternative to the outdated, expensive and cumbersome proposition offered by high street estate agents. In a recent YouGov survey focused on the Meridian region and commissioned by ITV, those surveyed were four times more likely to use the services of Purplebricks than regional traditional agents.
As well as the recent investment from Woodford Investment Management, earlier in the year Purplebricks.com secured multi million pound investment from investors including Paul Pindar, Martin Bolland and DN Capital. Current investors have also invested over ￡1m alongside Woodford.
On Purplebricks.com, Neil Woodford, head of investment, Woodford Investment Management, says:
“Purplebricks represents a highly disruptive business model in the world of estate agency. The business has the vision, the technology and an experienced management team – and now with the funding that it now has at its disposal, I see a significant opportunity for the business to lead the market in changing the way we buy and sell houses in the UK.
“Given that the vast majority of property searches take place on the internet, a business that provides a ‘virtual’ offering without expensive high street offices can significantly undercut the current market.
“Its 24-7 model significantly reduces costs to the consumer, improves flexibility and involvement, and hence dramatically enhances the service offered by traditional agents. It is innovative, scalable and disruptive with technological barriers to entry.”
Purplebricks.com CEO Michael Bruce added:
“Neil Woodford’s investment in Purplebricks.com represents a huge milestone for us and a major turning point for customers looking to sell, buy or let their property in the UK. Neil recognises the need for change and believes that our unique model and revolutionary platform are the future. We will be continuing our programme of growth with a launch for Purplebricks.comacross central England, building towards a nationwide launch shortly.
“The success we have had so far has proved that our model works, with thousands of people choosing to engage with the brand, not only because we cost less but because the service from our local property experts has been remarkable and to some, unbelievable. Building on this initial success we will continue to challenge the traditional estate agency model that has been left untouched for too long.”