Purplebricks denies newspaper claim that it's selling lettings division

Purplebricks says a newspaper story suggesting it will sell off its rental business is not true.

A company statement this morning, issued to the media some 72 hours after the rumour was printed by the Daily Telegraph, says: “The article that appeared in the Telegraph this weekend regarding Purplebricks’ plans to sell our lettings business is not true. Lettings is a crucial part of our growth ambitions at Purplebricks and we will continue to invest in this part of our business as we move into 2022 and beyond”.

The agency - which in recent years has retreated from a string of international sales markets - was said by the Telegraph to be discussing off-loading its rentals side in the UK. According to The Telegraph, Purplebricks chief executive Vic Darvey and other executives had discussed a possible sale of the lettings division; the newspaper said auditors had been approached to value the division ahead of a possible sale.

Purplebricks has admitted that it has failed to properly serve legally required documents to tenants explaining their deposits have been put into a national protection scheme, and has told shareholders that this could cost the firm as much as £9m. The Telegraph puts the potential liability at more than three times that amount.

A month ago Purplebricks revealed that its head of lettings had quit with immediate effect with the terse statement: “Helen Ogden, head of lettings, has decided to move on from Purplebricks. We will be announcing a new head of our lettings business in due course.”

In fact, no announcement of a new head of lettings has been made.

Shortly before the end of last year the Telegraph broke the lettings scandal regarding Purplebricks and tenant deposits, saying: “It is understood that since the online estate agent was founded in 2012, it has failed to properly serve legally required documents to tenants explaining their deposits have been put into a national protection scheme.

“These documents, known as prescribed information, must be given to tenants within 30 days of the deposit being paid. Failure to do this means the tenant can claim back up to three times the value of the money.

“Tenants have a six-year limitation period in which to make a claim against either the agent or their landlord. A source with knowledge of the business said Purplebricks' historic liabilities could be as high as £30m, assuming everyone eligible to make a claim did so.”

At that time Purplebricks refused to say how many deposits were affected nor how long the law was breached by the deposits not being lodged in a scheme.

This gave rise to speculation that landlords may have found themselves open to the risk of prosecution.

A statement from the agency last month said: “Due to the introduction of a new lettings IT system, a small number of tenant deposits were not paid into an authorised deposit scheme. As soon as we identified this issue, we took action and have now registered these deposits. We are currently communicating to the affected landlords and tenants.”

A spokeswoman added: “We won’t be answering any other questions.”