PropTech has gone from a buzzword for internet savvy estate agents to a whole new industry - this is where data and technology are used to improve the lives of homeowners and renters.
To get the inside scoop on the PropTech scene, we spoke to Will Darbyshire, UK editor of Unissu. His firm reports on PropTech to over 100,000 people across the world. We asked his opinion on why the industry is growing the way it is, what PropTech will look like beyond 2020 and the problems he faced as a renter when moving from Sheffield to London.
What is driving change in the housing industry and the rise of PropTech?
Will: There are several factors including consumers now having a lot more choice and that real estate companies who adopted technology early have achieved good results which is forcing others to move quickly.
Where does real estate sit in terms of digital transformation?
Real estate is quite behind in comparison to innovation in other industries. It’s more than the application of technology, it’s an entire mentality. The industry has operated quite successfully but now people are asking for improvements and for more change to happen.
What are PropTech’s biggest problems?
One big problem is a rise in companies that provide solutions to problems that don’t exist or spend too long trying to talk about how they do what they do, rather than the benefit and value of what they do.
The other problem is the general public not being savvy about the good choices. There needs to be a rise in awareness on companies that are providing real innovation otherwise the old school systems continue.
Has your experience made it easier to navigate renting?
I thought it would be easy to find a flat in London without going through a traditional agency. When I moved from Sheffield, I was convinced I was not going to use an agent. But the property choice was not there, there was a complex process of who you organise a viewing with and who you pay fees to, then a different person you pay for maintenance. You end up being blindsided by these upfront payments or additional fees which is frustrating.
What do you think of the current rental deposit system?
The whole deposit thing doesn’t work, it’s not a fair system.
Forcing people to pay a huge amount upfront blocks people from being able to move.
It blocks them from being able to take a step up and get something that feels more like a home than a student flat. The biggest issue is how long it takes to get your deposit back from your previous place. The order for the renter is unfair. You shouldn’t have to pay out a second deposit when you are waiting for your first to come back.
Do you think people will be renting forever or are there changing opportunities for renters?
Data is going to fuel every progression and innovation in real estate. There are clear benefits for tenants or home buyers including using renter information for mortgage applications.
For example I don’t have a credit card as I don’t trust myself with one but if I am continually paying my rent off on time every time, that should absolutely be contributing to my credit score. We need to make sure we are using this data ethically but it can be a way into the property market.
Finally, where do you see PropTech’s continued influence?
Real estate over the past 10 years has changed dramatically. It’s changed from a straightforward and closed off industry of ‘build property, sell property’.
PropTech and real estate have much more responsibility particularly in two areas of climate change and the housing crisis. Real estate has an immense environmental role as 40% of carbon emissions come out of the cities and we have millions of people across this country without adequate shelter.
PropTech will continue to shape our changing attitude and solutions to housing.