We have all heard of FinTech, but now there is a new portmanteau cementing itself as commonplace lingo in the property sector. PropTech, in its simplest form, is the utilisation of technology for advancement in the property industry. With a surge in technology over the past 10 years, companies have transformed the way they operate and the property sector has not been left out.
The buzzword has become a favourite with media outlets and its emergence has gained momentum quickly due to a public germination. A new wave of companies in the property sector have been harnessing technology to refine, improve, and reinvent the services currently being offered. With a majority of these new players being start-ups, innovation in PropTech is tangible and exciting.
Why is PropTech important?
The way in which we live our lives has changed dramatically due to new business models centred around technology. We can travel via Uber, read a book on a Kindle, secure a holiday let with Airbnb and order a meal via Just Eat. No industry can afford to stay stagnant in a world that is constantly logged on. Just like FinTech companies improve financial services for customers, PropTech companies seek to do the same in the property world.
Let’s take the average property buyer’s least customer friendly experience – mortgage application. The nemesis of many, applying for a mortgage is just one of many current areas in the property industry that requires improvement. Traditionally, the process has been a tedious pen and paper job, taking an average of three months to secure.
Backed by Zoopla, Trussle is a PropTech start-up tackling the issue head on. Coined as the UK’s first online mortgage broker, the company claims to be a ‘hassle-free way to get a mortgage online’ and save people money and time in the process. Similarly, Habito, who also pitch themselves as the UK’s ‘first digital mortgage broker’, are offering a similar set-up; a fully automated brokering service.
Given the headaches many experience across a multitude of different segments of the property industry, the emergence of PropTech has been a welcome band-aid. Since the UK’s decision to leave the European Union, speculation over the future of the property industry has been rife and the multitude of PropTech start-ups over the past two years has made a dent in public’s scepticism. Some services and areas covered by PropTech companies include:
• Online property portals
• Property rental apps
• Home services portals
• Home automation products
• Property management tools and platforms
• Co-sharing office space rental apps
• Flat mate seeking apps
When did PropTech first begin?
We did not know it back then, but PropTech was conceived when the internet became accessible by the majority of the world. Although merely a trickle in the mid-1990s, people recognised that technology could bring efficiency and transparency to the property industry.
The initial batch of first generation PropTech companies emerged in the early 2000s. Harnessing the capabilities of popular search engines of the time such as Yahoo and Ask Jeeves, Rightmove became the UK’s front runner and Trulia saw success in the US.
Property search was tapped into as an initial first port of call for improvement nearly 20 years ago. Today, PropTech firms are going above and beyond.
How will PropTech develop?
For any company that has a vested interest in the property industry, the rest of 2017 and early into the new year looks to be exciting for the progression of property technology. In the latter part of 2016, a large number of PropTech firms received substantial financial backing from some big players in the industry and this has driven advancements over the course of 2017.
As the year progresses, it is predicted that some of the UK’s property giants will invest in or merge with start-up PropTech companies. This is likely to come off of the back of Zoopla’s £1,000,000 investment into ‘four promising and innovative property technology companies’ to help elevate their development and improve the Zoopla experience.
Currently, experts believe PropTech has escalated to PropTech 2.0. They comment that clever and hard-working people backed by billions of pounds worth of investment is undoubtedly a great recipe for success and explains the exciting changes seen in the way property is traded, used, and operated. However, it is predicted that money and PropTech firms will be lost as the months and years pass, resulting in a crop of elite survivors being left.
PropTech 3.0, the cream of the PropTech crop, will have a radical impact on an industry that has been infamously conservative and slow-paced for too long.
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