Tech has re-shaped the residential property space in recent years, but how much room is left for disruption? Beth Daniel explores.
There’s no place like home, and in the UK it seems we’re all desperate to be homeowners. So much so that property prices just keep rising – research by Savills found the total value of residential property stood at £5.75tn in the UK last year, an increase of £966bn since 2010.
With this growing market comes growing opportunity for technological disruption, and recent innovation within residential PropTech means finding, managing and selling your home is becoming increasingly easier.
Finding a property
Property portals like Zoopla and Rightmove, possibly the most obvious residential PropTech disruptors, have stepped in and streamlined the property search process over the past 10 years. Bringing together suitable properties according to users’ preferences, such as property size and price, the need to visit individual estate agents has been eliminated.
Aside from this home comparison model, independent online estate agents, often with properties featured on comparison platforms, have started to emerge.
One of these independent agents, Hatched, was born out of founder Adam Day’s frustration at being unable to sell property outside his area. Based in Hertfordshire, Hatched advertises properties on comparison platforms, regardless of location, and centralises enquiries to its Herts location. This allows the firm to reach a broader client-base, improve efficiency and reduce selling fees.
Day doesn’t view entrance into the online estate agency space as a simple task, however. “There will always be new entrants and smaller players in the sector, but it is incredibly difficult to get the traction if you’re starting now,” he said.
Most recently trialling virtual reality tours and smart online viewings, where agents use a webcam and microphone to show people around properties, Hatched relies on technological innovation to improve efficiency and benefit its buyers and sellers.
And it doesn’t stop there. Day added: “PropTech is an exciting part of the future of estate agency and there are many more things that will come out over the next 5-10 years.”
Buying a property
Once you’ve found your dream property, the next step is funding the purchase. Frustrated by the notoriously complex mortgage process, and the near loss of his home as a consequence, Daniel Hegarty founded digital mortgage broker Habito.
Analysing mortgages from across 100 lenders, Habito’s technology identifies the best mortgage for the applicant based on individual circumstances. And with its recent launch of a mortgage advisor chatbot powered by artificial intelligence, the firm is finding new ways to innovate.
Hegarty doesn’t think the residential property industry has undergone sufficient disruption yet, however.
“The mortgage broking market is crying out for innovation. It accounts for 69% of all mortgages completed each year, yet is remarkably untouched by tech.
“It’s not a space where we can lobby for change, startups like ourselves will have to force change to occur,” he said.
Despite this, Hegarty is optimistic about the future of residential PropTech.
“Technology will ultimately make the traditional mortgage industry disappear. The archaic mortgage methods available today are not sustainable. The world is becoming digital-first and millennials who grew up with the internet and smartphones, will value the transparency of automated financial platforms,” he concluded.
Ishaan Malhi, founder of mortgage advisor platform Trussle, also seeks to address the lack of tech innovation in space. The platform explores the market for suitable mortgages based on a user’s details, then guides them through the application process.
Customer care is important to Malhi, especially if tech platforms are to eventually replace traditional ways of obtaining a mortgage.
He commented: “We’re seeing much more demand for 24/7 online services, and property is no exception. As more services make their way online, we need to ensure we provide customers with the same level of service that they would expect from a bricks-and-mortar business.”
Maintaining a property
Once the property is bought and paid for, or you’ve moved into your rented property, the next step is to look after it. Apps like DAD help people do just this. Inspired by his own reliance on his Dad to help fix a broken tap, founder and CEO Ben Wynn decided to set up his company in 2015.
“That’s when I realised the power of being able to video call an expert – someone who has the knowledge to empower you. DAD was born that morning from a belief that knowledge is the ultimate power tool,” he explained.
DAD users can make video calls to its ‘home repair experts’. Dispensing of callout fees, the experts talk users through fixing problems themselves, or arrange for someone to be sent out. If they can’t help, the call (usually £10) is free.
Wynn added: “We are part of the new ‘advice economy’, where wisdom is valued by the customers and shared by the experts. In the same way that Uber and Airbnb operate as live marketplaces, DAD is a place to buy and sell knowledge and expertise.”
Tech is empowering consumers to find solutions independently and with ease through their electronic devices.
“Homes and homeowners are getting smarter. As connections improve and people embrace the Internet of Things, the way we live in our property is bound to change. Technology is bringing bricks and mortar to life,” Wynn concluded.
Similar innovation is happening within the rental sector, with tech stepping in to reshape the relationship between landlord and tenant.
Orla Shields, CEO and co-founder of property management app Rentr, experienced an all-too-common problem between landlord and tenant when she moved to London: “I had a particularly bad experience renting, mostly in relation to my relationship with our estate agent and landlord, and had a protracted debacle trying to get my deposit back. I felt frustrated and a little powerless in the situation.”
The early-stage startup provides a mobile solution for property management by connecting landlords, tenants and tradesmen, easing communication between the parties.
Shields also agreed that the residential property market is yet to fully catch up where tech is concerned, envisaging a future of compromise between tradition and technological innovation.
“I don’t think we will see traditional modes of letting and real estate sales being wiped out, but I think the smart ones will revise business models and adopt elements of PropTech. Those who don’t will struggle to sustain themselves as consumers demand more value and efficiency,” she said.
Value and efficiency also represent the source of inspiration for rental management platform No Agent. Appalled by the poor experience and cost of using a letting agent, CEO Calum Brannan sought a tech alternative.
“All I could see were what I like to describe as ‘estate agents with digital wheels’. Platforms that when you dig past the gloss give you that same old experience. Such as a sales call before you can proceed or a glorified contact form to go live,” he said.
By charging landlords a monthly fee, No Agent uses tech to automate the majority of the lettings process for the landlord – including marketing, administration and customer support.
Brannan is optimistic about the future of PropTech in the letting industry: “There are an estimated 8,000 letting agencies in England alone, I believe that technology companies will take a part of the industry.
“PropTech will really bloom when multiple things align, when automation infiltrates every sector. Smart systems talking to each other will drive down the cost and improve customer service. That can only be a good thing in the property sector.”