Purplebricks Group PLC Response to the ASA ruling
October 18 2017 - 1:00AM
RNS Non-Regulatory
TIDMPURP
Purplebricks Group PLC
18 October 2017
18 October 2017
Response to the ASA ruling
One issue dismissed - one upheld, updated TV adverts on air
The ASA has today issued its conclusion on two issues relating
to the Purplebricks TV adverts in the UK. The first issue, whether
the TV adverts implied that Purplebricks did not charge a fee for
its service, was dismissed by the ASA. On the second issue, the ASA
agreed that it was not sufficiently clear in the TV adverts for the
average consumer, that the flat fee was payable to Purplebricks in
all instances.
Purplebricks has already updated its UK TV adverts to make this
even clearer. The new wording has been approved by Clearcast. While
the new text has only been aired for a couple of days, there has
been no noticeable impact on the business.
Purplebricks would like to make clear that it now has a
proactive, regular and positive dialogue with the ASA and all other
relevant professional bodies. The TV adverts followed the proper
approvals process, being cleared by industry body Clearcast who,
unlike the ASA, have the role of giving prior approval to TV
adverts. No issues were raised.
Commenting on the announcement, Michael Bruce, Group CEO,
said:
"We are surprised by the ASA judgement on the flat fee wording
because prior to air our adverts went through the proper approvals
process, including the official clearance body Clearcast who have
continued to support their original judgement with the ASA.
Purplebricks is firmly on the side of the consumer, offering an
alternative to the commission based model. As a leader of industry
change some noise is inevitable.
Purplebricks is committed to increasing levels of transparency
within the industry, publishing its fixed fee rates on the home
page of its website so all consumers from the outset have certainty
as to the cost of selling. Purplebricks is far more transparent
than traditional estate agents who do not typically publish their
rates, allowing them to charge much greater and varying fees
dependent upon a customer's ability or capacity to negotiate."
For further information, please contact:
Purplebricks +44 (0) 20 7457 2020
Michael Bruce, James Davies
Zeus Capital (NOMAD) +44 (0) 20 3829 5000
Nicholas How, Benjamin Robertson
Peel Hunt (Broker) +44 (0) 20 7418 8900
Dan Webster, George Sellar
Investec Bank (Broker) +44 (0) 20 7597 5970
Keith Anderson, Carlton Nelson
Instinctif Partners +44 (0) 20 7457 2020
David Simonson, Mark Reed,
George Yeomans
Notes to Editors
Purplebricks is the leading next generation estate agency in the
UK and Australia, combining highly experienced and professional
Local Property Experts and an innovative use of technology to help
make the process of selling, buying or letting so much more
convenient, transparent and cost effective. Purplebricks is
transforming the way people perceive estate agents and estate
agency. Building on its UK success, Purplebricks launched into
Australia in August 2016 and the US in September 2017.
Unlike traditional agents, where customers only pay upon the
sale of the property, which effectively means that those that do
sell pay more in order to cover the costs of those that do not
sell, Purplebricks believes it is more equitable that everyone
should pay, charging a flat fee at instruction. This helps to avoid
the industry issue of timewasters and those that are merely
'testing the water' and underpins the low, flat fee model.
Customers in the UK and Australia can choose to pay at
instruction or defer, at no extra cost, to the earlier of ten
months from the date of instruction or the date of sale. If a
customer wishes to defer payment, they are required to use
Purplebricks' conveyancing services for the sale.
Purplebricks charges GBP849 (inc. VAT) for a sale anywhere in
the UK besides London and surrounding areas, where there is a
charge of GBP1,199 (inc. VAT). There are additional charges if the
customer wants Purplebricks to undertake the viewings on their
behalf, if they require an energy performance certificate or a
Rightmove premium display, amongst other services that are
available.
The business model is low cost, flexible and cash generative,
without the need for an expensive leased estate. LPEs are
self-employed and receive a flat fee per instruction and can earn
additional fees from the sale of ancillary services including, but
not limited to, conveyancing, mortgage referrals and insurance.
Purplebricks listed on the Alternative Investment Market (AIM)
in December 2015, raising GBP25m of growth capital before listing
costs at 100p per share. In February 2017 Purplebricks raised an
additional GBP50m (gross) through a share placing to fund US
expansion.
This information is provided by RNS
The company news service from the London Stock Exchange
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