Leonie Martin looks at the new wave of tech-start ups blowing open our property market.
The age of digital ‘disruption’ has long since entered the UK’s most prosperous industries. Tech start-ups, Airbnb and Uber have turned their respective industries on their heads; the rise of fintech has transformed the entire landscape of financial services, and online shopping platforms such as Alibaba and Amazon have contributed to an increasingly dominant e-commerce presence in our retail industry.
What is interesting is that, despite this surge in technological innovation across our economy, the UK’s property market has remained somewhat unchanged. Whilst online portals such as Zoopla and Rightmove have been around for a while now, and have brought transparency and information to the market, the fundamental procedures of buying a house, acquiring a mortgage and renting commercial space have continued to involve long, paper -heavy processes, and critical areas have remained stagnant.
According to Robin Klein, who is co-founder of seed VC LocalGlobe and an investor in more than 100 companies including Zoopla and Trussle, writing in City AM this is about to change. The rise of ‘proptech’ is upon us, but what does this really mean?
Proptech start-ups such as FixFlo, Trussle and Landinvest among others are eliminating the inefficiencies in the market and automating the arduous processes with which the property industry is defined by, making services cheaper for consumers and more cost effective for property professionals. Trussle, for example, uses software and automation to search through thousands of mortgages in seconds to advise customers of the best available deal and then manage the entire process for them, a task which, in the past has been a gruelling and time consuming one.
The evolving nature of modern employment and the increasingly unaffordability of homes, has sparked a change in consumer demand and catalysed the emergence of this new category of tech start-ups. Today’s generation of buyers who are increasingly self-employed, with less reliable income sources and relatively short credit histories are looking for alternative mortgage providers. Peer-to-peer mortgage startups such as Landbay and Fruitful, have tapped into this more modern consumer demand within the mortgage lending market.
As reported in the Guardian, the private rented sector has almost doubled since 2002. This additional factor contributing to the change in scope of consumer demand has also not gone unnoticed by the emerging proptech scene. Companies such as Goodlord, who provide free software to e-sign tenancy agreements, collect deposits, admin fees and move in monies have flocked to bridge this gap and flourished in the current climate.
So what does this mean for the sector and the established companies who are vying to remain relevant? Just last week, Zoopla announced exclusive partnerships with four UK proptech startups involving £1m worth of investment in attempts, according to the Financial Times, to ‘diversify its offering in the face of increasing competition‘. A housing market at the forefront of both the UK’s political and media agendas and an already flourishing start-up culture has seemingly set the stage for a new wave of tech start-ups ready to revolutionise our property market and provide a desperately needed alternative solution to the UK’s housing difficulties.