It’s been a fascinating, if occasionally turbulent, few years here in the UK; when David Cameron first promised a referendum on EU membership back in 2015, even our best minds had no idea quite how dumbfounding the events that followed would be.
A sure-fire win for Remain was upturned by a narrow a Leave victory, at which point Cameron jumped ship before most of us had buttered our toast. Michael Gove, having stated repeatedly that he doesn’t have what it takes to be leader, stabbed Boris in the back by telling the nation that he’s the only man who has what it takes to be leader. It didn’t take long for Gove to reveal his overt repugnance, and after Andrea Leadsom suggested that only a parent could lead the country, she too fell away. It was Theresa May who finally staggered from the flames.
Despite a relatively strong Tory governance, May grew heady from surprisingly positive opinion polls and, having previously stated on multiple occasions that she would never plunge the country into a snap election, plunged the country into a snap election under the guise of strengthening her parliamentary majority and bolstering her negotiations with the EU.
That misguided plan, however, was scuppered by the The Summer Of Jeremy Corbyn. The Labour leader and old-timer surprised the entire nation, not least his own shadow cabinet, by stripping the Tories of any sort of majority at all. People like Jeremy because he seems honest and promotes peace and takes the bus just like you and me. But then other people hate Jeremy because he seems dishonest and is almost definitely ‘a terrorist’ and doesn’t even own a car.
In the midst of all this rubbish, one would be forgiven for assuming that the atmosphere has grown somewhat sour around here, but it’s not the case. And one of the biggest surprises, post-Brexit, is the fact that the property industry has not only survived, it has thrived. If 2017 keeps going the way it is, the UK will be able to boast more PropTech investment than anywhere else in the world.
How can it be possible that the most valuable asset class of a nation in political and geographical limbo can maintain such growth? The way I see it, there are a few reasons.
All anticipation of a post-Brexit property slump was proven wrong almost immediately. In fact, since Brexit, UK commercial property is healthier and seemingly more prosperous than ever.
It is my opinion that the vote to leave Europe may have contributed directly to this period of boom. By drawing attention to an uncertain future, Brexit may have forced big companies that hold a major stake in the UK economy to play their hand earlier than they were perhaps planning to.
In or out of Europe, the UK, and London in particular, are essential hubs for big US companies. The UK is America’s portal to the European market and, because business is carried out in the English language, it likely always will be. Therefore, companies like Facebook, Google and Apple have significant interests in the health of our economy. As such, in the wake of Brexit, they may have felt the need to act quickly to show solidarity and belief in the future of Britain. Apple purchased much-revered office space in the Battersea Power Station and Google has committed to a sprawling ‘landscraper’ campus in historic King’s Cross.
Had Cameron not been a complete twonk and called for a referendum based on self-interest and vanity, these companies might not have yet played their hands, in terms of investing further in the UK, and 2017 wouldn’t be proving such a bumper year for property.
What about UK PropTech?
Let’s move away from general property to focus on UK PropTech. What forces have allowed investment and growth to keep rising in a period of such uncertainty?
First and foremost, it was time. Between 2014 and 2016, America and Asia enjoyed the majority of investor’s interest. Millions upon millions were ploughed into disruptive startups as well as established companies pivoting to survive in this period of digital transformation. Meanwhile, the UK plodded along, sure and steady, waiting for its time in the spotlight. That time is now. America and Asian investment have levelled off and all eyes have turned to Europe.
But that’s not to sell short the talent that we have in the UK. Our budding startups and emerging brands have made bold moves to try and push increased adoption of their services and products. The property world is notoriously cagey towards new tech and one early barrier to the UK’s success was a reluctance to adopt the innovative systems being introduced.
That’s why PropTech companies have had to be simultaneously patient and proactive, re-analysing their business models to try and overcome initially cool receptions. One example of this is EyeSpy360, a virtual reality company who provide 360-degree virtual tours for property. In order to speed up the adoption of their tech, they made a brave and brilliant move. They realigned their plans in order to offer a Freemium service that allows anyone and everyone to create a virtual tour of their property absolutely free of charge.
A significant obstacle to wider market adoption of VR is accessibility. By providing the equipment and expertise required for people to create DIY VR property tours, EyeSpy 360 are actively contributing to the rising demand for the technology.
Numerous examples of this sort of creative problem solving have been key contributors to the rapid growth of UK PropTech.
The Queen is Ditching Deposits
Yes, the snap election was a pantomime, but it did result in a Queen’s Speech sooner than we planned. And because the Tories had lost their parliamentary majority, they were unable to push through the majority of their proposed policies. The Queen’s Speech was much shorter and lacking in solid pledges than ever before. However, what’s really interesting is that one thing that did make it in was a complete ban on the hidden fees that estate agents and landlords like charge incoming rental tenants. In a speech thin on content, it’s important that this was chosen for inclusion.
It has caused a mixed reaction; predictably, the people who get charged are happy, the ones who do the charging are glum. Fees and deposits are big news here, and there are numerous PropTech groups working to save homebuyers and renters money by eliminating extra costs.
We have companies like Purplebricks, the online estate agent, running ads like this, directly using ‘no fees’ as their hook. And then there is Reposit, a PropTech company with the singular mission of eliminating the tenancy deposit with an affordable and reliable alternative.
Interestingly, a large collective, lead by Zoopla (our equivalent of Zillow), has recently announced that they themselves are to introduce a tenancy deposit alternative; there could be no bigger sign that there is a growing interest in this niche sector.
Outlawing hidden fees is a good example of how changes in UK laws and regulations are paving the way for greater PropTech success, and it’s it’s early introduction is another example of UK PropTech enjoying a happy accident resulting from arrogant politics.
UK PropTech has long been a secretive industry where companies are reluctant to show too much and are closed to collaboration. But that’s normal for a young industry, still working out exactly what its core mission is. Thankfully, this is coming to an end as UK PropTech enters adolescence and entrepreneurs are realising that, to act truly in the interests of the property industry, they need to interact, share and collaborate with other companies and institutions.
For me, this sort collaboration is an essential ingredient in the future success of the UK scene. Without it, we place great limitations on the speed at which we can innovate.
As well as inter-PropTech, we are also seeing an even more exciting type of collaboration, one which demonstrates how the mentality of our major institutions is changing. One recent example is the announcement that HMLR and Ordnance Survey have partnered up with the sole purpose of helping the PropTech community with more accessible, more efficient and more comprehensive land data.
The UK has long suffered from sluggish, anti-tech attitudes from the established, traditional property firms. In 2017, we are finally leaving these Luddite attitudes behind and even the most traditional of institutions are opening up to collaboration with tech.
The subject of land data brings me nicely to another key area of UK PropTech; the argument of open data.
Open data, data that is free for all, is quite simply essential for future growth. If big companies don’t share their data sets with each other, all they are able to do is analyse and reanalyse their own; over and over again. But if everyone shares, everyone has access to everything, and with access to everything, creative minds can do anything.
There is still some reluctance to sharing, especially from the biggest of firms, but to illustrate how seriously the idea of data is being taken in the UK, I point you in the direction of a man called Dan.
Dan Hughes is somewhat of a PropTech celebrity over here, thanks mainly to his position as Director of Data and Information Product Management at The Royal Institute of Chartered Surveyors (RICS). For such a traditional body to create such a forward looking job position shows how important the improvement of data practices is being taken, and a great indicator that we are moving towards being a truly forward thinking industry.
Some Things Still Need Work…
Things are looking good for UK PropTech, but that’s not to say there aren’t a few areas of concern. One example, and a particular niggle for me, would be the apparent reluctance to distinguish between disruption and innovation.
Although ‘disrupt’ is very much the zeitgeist term, I am firmly in the camp that believes more in innovation, and it concerns me some recent PropTech announcements and forecasts have been more focussed on disruption.
The difference between the two, as I see it, is that innovation is technological advancement for the benefit of the user; disruption is the uprooting and replacement of a previously trusted system.
Disruption certainly has its place and is an important part of the digital transformation, but here in the UK, I don’t think we are asking enough questions before accepting disruptive rather than innovative forces.
For example, over in America, since Zillow introduced instant offers as part of their service (a clear attempt to bypass the realtor), there has been a strong backlash from the realtor community, including calls to boycott the Zillow platform altogether. I think it’s interesting, and a little disappointing, that we’re not seeing similar reactions over here. Zoopla, our prominent online property portal, has, in my opinion, obvious intentions to introduce a series of services that would normally be fulfilled by a broker.
Much like Uber has nearly wiped London cabbies off the map, Zoopla could start following up on their own leads, rather than selling them on. And yet nobody is saying anything about it.
The people at the core of our PropTech industry have worked too hard and too long to be completely disrupted by a full-service giant. I hope, moving forward, we hear more from the people who want to protect the core values of property and stop those in their tracks who want to introduce forces that go against the wider and greater interests of the industry.
The UK benefits from a rich history and enviable culture that is recognised the world over. Because of that, it will forever remain a key global hub. We are lucky in that. But there is still a real issue of North and South divide. As a nation, we place too much emphasis on London, and major cities in The North remain underserved by the government as well as global investment.
For UK PropTech to truly thrive, this needs to change. Currently, London has very different cultural and political stances than the vast majority of the country, something painted in screaming colours by the Brexit vote. This is the direct result of an uneven distribution of wealth and with property being the most valuable asset class we have, it carries a large responsibility in addressing this issue.
Our political future may be impossible to predict, but that doesn’t seem to have had any effect on the appetite for UK real estate. Just so long as our industry keeps its eyes open and looking forward, and our government improves efforts to share London’s success with the rest of the country, our PropTech entrepreneurs and innovators have a clear and fruit-lined road ahead.
Or maybe it’s all down to ‘The Bo-Jo Effect’
The last few years have been negotiated with a stereotypically British bumble, and maybe that’s the secret to our success? The rest of world finds it endearing, hence Boris Johnson’s staggering popularity overseas. It could be that, rather than turn the world off, our political ineptitude has actually helped the UK become more attractive. Maybe, when we finally get our shit together, investors will get bored and PropTech investment will level off?