The multi-billion pound property industry is one that every single one of us will have contact with in one way or another. However, whether or not that contact is well anticipated or not is a different story. The industry, monopolised for the most part by traditional estate agents conduct itself in a way that can sometimes feel confusing and dated. Over the years, there have been thousands of intelligent entrepreneurs in proptech that were backed with millions in investment to transform the way in which property is traded, used and operated.
Professor Andrew Baum of the Saïd Business School, University of Oxford has said:
“There are clear problems with how UK houses are transacted.”
These clear problems are what then encouraged the generation of Rightmove in 2000 and Zoopla in 2008, which provided the service of listing properties in collaboration with established estate agents and in the more recent years, supplied its site visitors with a plethora of information regarding property investments, local area guides and rent/mortgage outlines for each property listed. In contrast, new contenders such as HouseSimple, Tepilo and eMoov began to make create waves in the industry by operating on a fixed-fee basis, as opposed to the traditional approach of taking a percentage from a sale, and facilitating property viewings and offers that are managed all from an online platform.
Estate agents generally aren’t loved by many, partially because of the extortionate fees and sometimes sketchy operations – the latest English Housing Survey puts the average figure at £223 per the tenancy agreement. Some entrepreneurs have developed platforms that cut them out entirely. Calum Brannan, the founder of prop-tech management company No Agent, offers landlords a way to manage their own properties online for a fixed fee – £35 per month outside London and £45 within.
After the success of Fintech, which gifted us with online banking, peer to peer lending and crowdsourcing – it’s certainly interesting to consider what proptech is doing for us and what more it can do in the future. Behind this shift toward more technological involvement in both the financial sector and property sector lies a clash of generations. Most startups are driven by and aimed at, millennials which is an important component for this discussion. Perceived as a more conservative and traditional industry, the property is in need of some diversification. Entrepreneurs are now more than ever from a highly diverse career and educational background as well as hailing from different parts of the world. Given the generational clash and changes to the sector, it is not surprising that there is some disagreement about the level of disruption that the new wave of proptech will create.
The growth and success of these new companies lie in the dysfunction of the current marketplace. Many young people share the unfortunate fear of not being able to get onto the property ladder, but the rental sector still thrives. Aidan Rushby, CEO of rental app Movebubble; created the app after experiencing appalling treatment through the rental process, a reality many of us know too well. Rushby hopes that apps like his can encourage a more transparent and user-friendly industry. On this topic, Rushby has said:
“Renting a new home sucks today, we simply want to make this fun and exciting like it should be,”