Neil Woodford has bought a £7 million stake in Purplebricks.com, a new estate agency aiming to grab house seller's attention with a fixed £599 fee.
The £30% stake in privately-owned Purplebricks.com represents his UK equity income fund’s biggest investment in an unquoted firm to date.
Purplebricks, which launched in April and offers a 24-hour service, levies a fixed fee of £599 for customers selling their homes. This undercuts the average high street agency commission of 1.8%, which on average generates a fee of around £5,600.
Meanwhile property owners looking to rent their home will pay a single fee of £199.
‘Purplebricks represents a highly disruptive business model in the world of estate agency,’ said Woodford (pictured).
‘With the funding that it now has at its disposal, I see a significant opportunity for the business to lead the market in changing the way we buy and sell houses in the UK.’
Purplebricks was founded by brothers Michael and Kenny Bruce. While it is not officially rolling out until September it aims to list around 15,000 sales instructions by the end of July.
For the financial year ending 31 July 2015 the firm is targeting 85,413 instructions and the following year 100,849, representing 10% of all sales.
Other investors attracted to the firm include former Capita chief executive Paul Pindar, who made a ‘significant’ investment in the firm a month before its launch.