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Purplebricks says sellers using online agents saved £140m last year by not going with high street firms

Land Insight to 17 April NS
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Sellers who used an online or hybrid estate agent last year saved themselves £140m by opting not to pay high street fees.

The claim this morning has come from Purplebricks, which says that the saving represented a 60% rise on the year before.

Its own customers, says Purplebricks, saved over £100m last year by using its fixed fee model “rather than paying much larger average high street commission rates”.

Purplebricks latest savings figure was compiled from data published by the HomeOwners Alliance and Land Registry.

It also says that despite commission rates falling, high street agents are still billing an average of £3,350.

Its latest savings figure claim is based on high street agents charging an average fee of 1.5%.

This figure comes from a survey of 2,000 Purplebricks customers in December who were asked if they received a quote to sell their property from a high street agent, and if so, how much they were quoted.

Purplebricks says that growing competition from online/hybrid agents has forced high street firms to lower their commission rate from 2.16% (1.8% plus VAT) in 2014, according to Which?

It says this has represented a saving of £1bn to house sellers over the past four years.

Altogether last year 1,067,000 homes were sold in the UK at a total value of £235bn.

Purplebricks has produced statistics showing regions where it says vendors using online and hybrid agents saved most last year.

The greatest savings were in the south-east, and the least in Wales.

Lee Wainwright, UK CEO of Purplebricks, said: “It is no surprise that more and more people are turning to hybrid estate agents.

“The transparency, convenience and potential savings on hefty commission rates makes the decision a smart choice.

“The way that people buy and sell property has changed.

“People want the personal service of Local Property Experts in combination with great technology so they can transparently and conveniently interact and see everything that is happening 24/7.”

The data was prepared for Purplebricks by Paul Crosbie of PR and journalism firm Crosbie Communications, using research from the HomeOwners Alliance EstateAgents4Me comparison tool. https://ea4me.hoa.org.uk/

Replying on behalf of Purplebricks to an EYE question about the actual numbers of properties sold by online agents, Crosbie told us: “It is possible to work out the number of homes sold by online and hybrid agents within an acceptable margin of error by looking at existing reports and cross-referencing with the Land Registry sales figures.

“You would need to look at the vibrancy of the market in those areas over the past 12 months and concentrate on population spread over specific postcode areas. Otherwise it will be rather time-consuming.

“I was more concerned with percentages as these show a more general trend rather than specific figures which can go up and down depending on local market conditions.”

Region No. of homes sold 2017 Average high street commission 2017 @1.5% Total savings by vendors using online and hybrid agents 2017
South east 149,160 £4,770 £29.2m
South west 103,000 £3,680 £14.1m
Wales 47,454 £2,240 £4.0m
East England 101,102 £4,250 £21.6m
Yorks and Humberside 84,490 £2,310 £5.6m
London 92,830 £7,200 £21.5m
Scotland 102,850 £2,150 £7.4m
North east 38,818 £1,900 £1.8m
North west 113,720 £2,300 £ 9.1m
East midlands 79,530 £2,885 £11.3m
West midlands 85,204 £2,770 £14.1m
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Source:: Purplebricks says sellers using online agents saved £140m last year by not going with high street firms