What Is Proptech?
30 March 2017
You’ve no doubt noticed the increasing use of the word ‘fintech’ in industry blogs and business columns over the past few months. Yesterday, I was introduced to another emerging sector: Proptech.
If you haven’t guessed, that’s property technology.
The property market has been evolving for years. Gone are the days where you seek out the property section of a newspaper to choose your next move; most house hunters use apps or go on to websites. Whilst estate agents, with their windows lined with images of homes, still exist, the technology behind selling a house is changing.
This largely stems from the fact that business models are changing. Just think about how you travel (Air B’n’B), get a takeaway (Just Eat), read a book (Kindle) or take a taxi (Uber). No industry can afford to stay stagnant.
So what is proptech, exactly? Here’s a quote from LendInvest:
“It refers to the wave of companies using technology to refine, improve or reinvent the services we rely on in the property industry to buy, rent, sell, build, heat or manage residential and commercial property.
“Just as FinTech companies aim to improve financial services for customers, PropTech companies have set out to improve our experience of a range of services in the property industry from accessing mortgages to creating energy efficient homes.”
So, apps for RightMove or Purple Bricks would fall under this remit. As would augmented reality – can you imagine being shown how your dream home might look without actually being in a room full of furniture and fixtures? Or simply holding your phone up to a room to pick your colour scheme and fittings? It would be like Pokemon Go for house hunters.
There is also the emergence of websites that offer to sell your house for you for lesser fees than estate agents. This presents big changes for a traditionally ‘bricks and mortar’ industry.
Scotland is usually full of keen self-starters with an eye for the next ‘big thing’. Indeed, the entrepreneur, Shaf Rasul, notes on his website that the proptech market is certainly burgeoning within Scotland. He has observed several creative minds and surveyors determined to get a slice of the action. It’s all about coming up with an “innovative commercial property platform.”
In that way, proptech is similar to fintech. It’s about making it easier for the user (or consumer) to get to their end goal: be that transferring money through a banking app or browsing properties in their desired area.
Proptech companies make services cheaper and more convenient for consumers through the use of technology, challenging the traditional models of the estate agent and the mortgage broker. Speed and convenience is the key here – especially with more workers moving away from a standard 9 to 5.
With more and more young people and Millennials struggling to get a foot on the property ladder, rental properties are almost certain to increase. Proptech is also proving useful for those who do rent or flat-share, as apps like BillHub make it easier to keep on top of who owes what.
No industry can afford to stand still – there’s now instances in America where bricklayers have been replaced by artificial intelligence – so it will be interesting to see how proptech develops and where it takes the market.
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Written By Barry Lee