Purplebricks sees no 'meaningful impact' from scrapping of letting agent fees

Online estate agent Purplebricks does not expect the proposed abolition of tenant fees for lettings, as set out in Chancellor Philip Hammond’s Autumn Statement on Wednesday, to have “any meaningful impact” on the business.

The company said the fees it charges are “modest and highly competitive” compared to its peers.

Up-front fees for tenants are currently £175 including VAT outside London and £209 in London and the group does not charge renewal fees.

Purplebricks reckons it can adapt the model swiftly and at minimal cost. This, combined with its low-fixed overhead model and pricing structure, “should prove even more attractive for landlords seeking excellent service and better value,” it said.

Chief executive officer Michael Bruce said: “Purplebricks was built on the ethos of putting the customer first and delivering, through the combination of people and technology, a superior service for less. The proposed changes to tenant fees represent a significant opportunity to further highlight to landlords the value that Purplebricks is already renowned for offering sellers."

Shares in estate agents slumped on Wednesday as it emerged they would be banned from charging fees to tenants, cutting off a chunk of revenues that has risen in recent years as administration charges have crept in for activities such as checking references and credit history and creating and ending contracts.

Hammond believes shifting the cost to landlords will save 4.3m households hundreds of pounds.

While some landlords may try to absorb the cost through rent rises, areas of high competition may see agents hit harder.

At 1016 GMT, the shares were up 4.4% to 113.81p.