by Jessica Aszkenasy
It is a universally accepted truth that moving houses is rarely an enjoyable process. From the endless hunt for a new home to dealing with a new landlord, the whole transaction screams anxiety from start to finish. But the development of property technology or “proptech”, is changing the game of house hunting.
Proptech describes the digitalisation of the real estate sector, changing the way we buy, sell, rent and manage property through apps, digital platforms as well as software, all in the name of efficiency.
“It’s very hard to find a renter that has a good word to say about the process,” says William Reeve, COO of Goodlord, a proptech start-up that has created a cloud-based software platform that digitalises all of the paperwork involved in renting a property.
“It’s not uncommon for that process to involve everyone pitching up together at the same physical branch at the convenience of the agent, probably not on weekends, with a pile of cash, which is just mad.”
More agency to tenants and landlords
Digital platforms put transactions back into the hands of tenants and landlords. Apps like Rentr, founded by proptech entrepreneur Vik Tara, allow landlords and tenants to take the process into their own hands, bypassing the services of an estate agent for a fraction of the price.
“Everything that we’re doing in terms of building technology for landlords and tenants is about self-service,” Tara says.
“With our technology you can go and see a place, go home and have a think about it and maybe at 11 o’ clock in the evening you can log in and pay for it and get the process running. It gives people a lot more control, flexibility, and transparency to see what’s going on in the process.”
Not everyone is convinced. Landlord and property developer Mike Saqui from Southampton used an online platform to try to sell his cottage in the New Forest, without success. He says that having an estate agent to guide you through the process is paramount.
“I had a very poor response. In the end I went back to using a normal agent and got triple the viewings and did sell it. If the property is with an estate agent, they at least will try and drive somebody towards a property they might not have thought of because they want to make their commission.
“I wouldn’t use an app to let one of my properties, I think the rental market is way too dangerous. I’m happy to pay the commission to have somebody sort things out and be on top of it,” he said.
“There are all sorts of pitfalls and you just don’t know who you’re dealing with.”
Estate agents need proptech to make services slicker
Tenants and landlords aren’t the only beneficiaries of the property sector 2.0. Proptech companies are also targeting estate agents, making their services smarter and slicker.
“You walk into a letting office and you’re not greeted like you are when you walk into an Apple Store. It’s the exact opposite, you walk in and people will look down at their computers so as not to engage with you because they’re doing something else,” says Tara, who also manages PropCo, that offers property management software to letting agents.
“Now you walk into an agent’s office and all of a sudden they behave like the guy from the Apple Store. They’re really helpful.”
“They’re carrying a tablet with all the information they could possibly have about anything that you’re going to ask them. That’s where digitalisation takes this space.”
With the letting fees ban coming into effect in spring 2019, prohibiting estate agents from charging fees to tenants, agents will have to work harder to earn back the loss of part of their revenue. The Guardian recently announced that over 150 estate agency firms went insolvent last year and up to 7,000 are at risk of going bust.
“It’s a big problem for some of the agents who have been a bit lazy and have been getting away with price touting on some of their fees,” says Reeve.
“There are two ways of dealing with that hit to their finances. One was is to try and save money, if you’ve got a room of hamsters spinning the wheels for you, you can automate those wheels and save money. Another way to do it is add value and make more money out of things and with our process we are well placed to do that.”
London at the forefront of the proptech push
London has been at the forefront of the push for the property sector to get up to speed with modern living. A study by law firm Osborne Clarke recently crowned the capital as the leading European city for the use of property technology in the built environment.
“People are used to doing everything on their phones these days, it’s a very convenient and quick way of doing things, so actually integrating it into the world of property transactions is very important at the minute and making sure that the system can keep up with that,” says Kat Terry, senior associate at Osborne Clarke UK.
“Technology is basically at the forefront of the property industry’s mind at the minute. It’s something that they know is going to be a key concern for the future and it’s something that they need to address to stay current.”