In the UK however, we’re nearing saturation for entrants embarking on the standard online agency model.
Will Handley is chief executive of HomeRenter, an online lettings platform
Whilst traditional estate agents have long dominated the multi-billion-pound property industry, it’s no secret that the industry is being severely disrupted by property technology (proptech).
High street estate agents have arguably failed to innovate, provide a satisfactory service or the best price to customers.
It’s therefore no surprise that proptech services, including the likes of Rightmove, Zoopla and Purplebricks, have cropped up to fill the gap.
These proptech companies have been fuelled on by constantly-connected consumers, used to using the Ubers and Airbnbs of the world, wanting an easier way to buy, sell and rent property without dealing with an expensive middle man.
Proptech’s impact
In proptech to-date there has been a real imbalance between the energy and investment in online sales versus online lettings.
However, with the growth in the private rented sector and the relative ease of ‘DIY’ letting, online lettings platforms have a big opportunity to tap into a huge and growing market.
The private rental market has doubled in the past decade, with 46% of 25-34 year olds now living in private rentals – compared with just 27% in 2006-2007.
In response, whilst traditional lettings agents aren’t immediately going ‘the way of the Yellow Pages’, the emergence of virtual services is creating more choice and better value for the consumer.
Beyond the disruption to the estate agency ecosystem, there are also players in the adjacent fintech space pioneering new ways to deliver services to property owners - such as Homeyfe (insurance) and Habito (mortgages).
Together, the proptech and fintech sectors can provide a complete end to end service for the consumer that rivals traditional providers.
The future of proptech
In the UK however, we’re nearing saturation for entrants embarking on the standard online agency model.
That’s unless proptech players provide a significant twist on the formula by combining something new.
For example, in the lettings space, this could include a managed community / marketplace model - on top of best-in-class technology. Or advances in the intersection between proptech and the ‘gig economy’; for example, our HomeViewer channel is a sub-community of trusted key-holders we’re piloting to assist landlords with inconvenient or remote tenant viewings.
Similar to services from Airbnb and TripAdvisor, there is also an opportunity for online platforms to provide intelligence in the form of a tenant and landlord review service.
Indeed our recent survey found 88% of landlords and 81% of tenants wished they could rate and review their counterpart online.
As such, the proptech envelope will likely widen to encompass more uses and services around and beyond the physical bricks and mortar assets.
Moving forward we see the opportunity for new proptech entrants to pave the way for a more modern renting system.
In particular, we see an opportunity to work with the likes of Experian about concepts such as The Rental Exchange whereby a tenant’s rent payment history counts towards their credit score.
Ultimately, the proptech industry is still just a small part of the wider property industry.
However, the market is changing and the industry is being disrupted in a similar way that other industries have been with the end result being more choice, improved service and better prices for customers.
In the UK however, we’re nearing saturation for entrants embarking on the standard online agency model.
Nevertheless, the opportunity is there for players who provide attractive offers to landlords looking to manage their portfolios entirely online and to tenants who often have no choice but to rent in an unaffordable housing market and are therefore after a simple, cheaper process.
