Real Estate

Purplebricks shares hit new low as property sector struggles amid Ukraine crisis – Property Industry Eye


Property firms, including estate agents, saw their share prices tumble yesterday in the wake of Russia’s invasion of Ukraine.

The UK government is imposing a raft of sanctions against Russia that will almost certainly have major ramifications for the UK property industry.

Foxtons, LSL Property Services, Rightmove, OnTheMarket, were among a number of property firms to see share prices fall on Thursday.

Purplebricks’ share price also continues to decline, having hit its lowest-ever level, dropping to just 17.75p yesterday.

Shares in the online estate agent have plummeted since its all-time high in 2017 of just under 500p, with recent regulatory failings, contributing to that decline.

Purplebricks, who are currently facing a class action lawsuit from over 100 former agents who believe they were entitled to the benefits given to permanent employees, despite being classed as self-employed, was recently forced to delay the publication of its first half results to provide for any potential future claims which could arise under the Housing Act in relation to this regulatory process issue.

The move followed speculation that the online estate agency could potentially face a bill of up to £30m after it allegedly put thousands of landlords at risk of being because it failed to follow basic tenancy law.

EYE revealed in November that Purplebricks had failed to properly serve legally required documents to tenants explaining their deposits have been put into a national protection scheme.

Purplebricks, which recently said the six-month period to October 31 had been “challenging”, is currently being investigated by Propertymark for potential tenancy law breaches.

A statement from David Oliver, head of Propertymark Compliance, said: “It is important that any allegation made against an agent be substantiated with viable evidence.

“As a representative body we take any allegations against our members incredibly seriously and we will be investigating the claims of failure to properly register tenancy deposits by Purplebricks.

“Legal procedures exist to protect both agents and their clients. Performing them properly not only protects agencies but is paramount for consumer confidence, providing transparency between businesses and their customers.

“Agents fight against a stigma and ensuring processes are in keeping with legal and professional standards is a key part in changing our reputation.”

 





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