Few industries have been left unscathed by ambitious digital startups disrupting long-established companies. From digital-only challenger bank Atom to ride-hailing app Uber, innovative technologies are being used to revolutionise customer experience and create new business models, tailored to tech-savvy consumers.
The property industry is no exception.
“Online property portals, such as Rightmove and Zoopla, have changed the industry massively,” says television property expert Sarah Beeny, owner of online estate agent Tepilo. “Only ten years ago, people looking to buy a home would have to call numerous local agents and trawl through the local property pages to find out what was for sale. But now, most people begin their property search online. Digital has made the whole process easier and quicker.”
Digital solutions may have already made an impact on the property sector, but property technology – or proptech – is far from reaching its true potential. House buyers still have to go through an often drawn-out and arduous buying process. As the quality of data in the industry improves, and becomes more accessible, much can be expected to change.
Gray Stern, co-founder and chief commercial officer of peer-to-peer lending platform Landbay, believes that blockchain technology could revolutionise the Land Registry and streamline the entire purchasing process – eliminating the need for conveyancing. “Couple that with finance and insurance provided in real-time via marketplace platforms and we’re at a point where transacting property becomes quite fluid,” says Mr Stern.
Virtually every part of the industry is set for change as proptech gains momentum. Rajeev Nayyar, director of property repair software firm Fixflo, foresees a future where continuous, seamless maintenance will become commonplace in many developments. For example, a boiler on the verge of breakdown can look for a repair method through its software and, if it fails to fix the problem, automatically contact an engineer who can print the required part on a 3D printer.
Through the use of new technology and advanced algorithms, online mortgage brokers are providing a quicker, lower priced and more convenient service than conventional brokers. “A fresh new breed of brokers has already emerged, using algorithms to quickly give prospective borrowers a complete view of the market, what they can afford, and which lender will give them the best rate,” says Ishaan Malhi, founder and chief executive of Trussle, an online mortgage broker.
As the quality of data in the industry improves, and becomes more accessible, much can be expected to change
“Where 2016 saw a lot of startups in the sector get started and work towards achieving ‘product-market-fit’, 2017 will be a transitional year for proptech when many of those companies mature and scale into their incumbents’ territory,” says Mr Malhi.
While technology will play a central role in the property industry going forward, the importance of personal interaction should not be forgotten. Even the most advanced technological solutions can run into problems and damage the customer experience, leaving users in need of non-artificial intelligence assistance. This is especially true as more and more property platforms appear online, all competing primarily on cost, leaving those companies that prioritise customer service standing out.
“As always it’s the best value proposition that tends to win and utilising digital to cut costs whilst investing in service is the way to achieve this,” says Stuart Law, chairman of Assetz Property, a Manchester-based property investment firm.
In the near future proptech will no longer be associated with just progressive startups, but traditional property firms will have also embraced many of these nascent technologies. “Artificial intelligence will become part of the industry’s DNA. As consumers, we will expect technology to do most of the thinking and organisational heavy lifting for us,” says Ms Beeny.
From 3D property walkthroughs to immersive virtual reality (VR) tours, technological breakthroughs will soon hit the mainstream. Buyers and renters still spend countless hours going from location to location searching for suitable properties, when VR allows them to view homes from anywhere in the world. The adoption of cloud solutions can help make it easier to access all property documentation in one place online, too.
“Technology will also allow properties to be more accurately priced based on big data, and reaching potential buyers will become a more straightforward process,” adds Ms Beeny.
However, a complete overhaul of the property industry through proptech isn’t going to happen anytime soon, according to Simon Heawood, chief executive of the UK’s first online Property ISA provider Bricklane.com.
“Given the size and value of the asset – and its usual outsized share of the owner’s net worth – disruption in property generally takes the form of improving what currently exists, whether it be by reaching customers more effectively, like Zoopla, or reducing operational overheads, like property management with Rentify,” says Mr Heawood.
The new, younger generation of consumers, who expect agents to be proactive and offer an efficient buying process at a competitive price point, are driving demand for proptech platforms. Inflexible high street estate agents who are only available during normal working hours will be the first to be disrupted, as buyers and sellers want agents to be accessible outside of the nine-to-five.
“In my view, the shopfront physical presence of the estate agency and particularly the letting agent will die away, transitioning to a principally online presence. While it’s an exciting time for the sector in general, it promises a bleak future for the high street estate agent who doesn’t evolve,” says Mr Law.