Prop Tech Association
The UK PropTech Association (UKPA) was founded in 2018. With a mission to foster collaboration between PropTech (Property Technology) firms and traditional estate agencies, as well as an environment conducive to PropTech innovation. UKPA’s members include PropTech companies, property companies, PropTech investors, and Professional Service providers. They also work with governments, regulators, industry stakeholders, and thought leaders to remove obstacles to PropTech growth and benefit their members. The UKPA’s network includes the UK Department for Communities and Local Government, the British Property Federation, London and Partners, and the world’s leading property technology alliance, PropTech For Good. As a result, UKPA has become one of the world’s leading PropTech networks.
What is PropTech?
Proptech, or property technology, is the use of technology and software to address modern estate agency needs. It may also refer to the plethora of startups and new technologies emerging in response to decades of inefficiencies and outdated processes in the property sector. CREtech (Commercial Real Estate Technology) and REtech (Real Estate Technology) are two alternative terms for PropTech which is more commonly used in the US.
The term “property technology” is not new. Indeed, its first version – PropTech 1.0 – emerged in the 1980’s, when personal computers were introduced and used in different industries including the estate agency market. PropTech 2.0 began with the increased accessibility of data and information via the internet and mobile devices, more than two decades after the first version. During this phase, business-to-business solutions and financial technology converged and were used by property developers and sellers to manage sales, bookings, and reservations digitally (i.e. shared economy, AirBnB and co-working).
An industry-wide shift from PropTech 2.0 to PropTech 3.0 accelerated with automation and blockchain technology. Blockchain enabled smart contracts, which are gradually standardising paperless transactions, title registration, and real-time ownership transfer. The effective use and implementation of blockchain technology will soon eliminate fraudulent ownerships and unauthorised transactions. However, automation has expanded to improve business processes such as tenancy renewals, maintenance, tenant offboarding, and deposit returns. PropTech now includes smart homes connected to the Internet of Things, promoting sustainable, efficient, comfortable, and secure living spaces.
Government Support in the UK PropTech Revolution
Even prior to the pandemic, UK Housing Minister Esther McVey, during a roundtable discussion with almost 700 PropTech Firms in the UK, announced plans back in 2019 to usher in a digital revolution in the property sector by releasing data held by local governments to foster the growth of the PropTech sector. As part of the initiative’s transparency push, compulsory purchase order (CPO) data will be made publicly available, enabling PropTech firms to obtain information about energy performance certificates and square footage of properties. The initiative also seek to create a national index of brownfield data with the goal of making it easier and better for developers to find brownfield land to build on. The UK’s PropTech industry, according to the government in 2019, is already worth £6 billion and UK is leading the world in property development and acquisition.
PropTech in 2022 and Beyond
Crunchbase reported that estate agency start-ups and PropTech companies raised almost £16 Billion in 2021 in construction and property management software. For 2022, Crunchbase predicts that finance, project management software and home improvement technology will thrive in investment. As per Crunchbase, “embedded lending” is also expected to have a significant impact this year. Lendflow, headquarters in London, is a leading UK startup that adapts embedded lending to enable software companies to integrate lending capabilities into their products, resulting in faster capital and more transparent lending.
According to Crunchbase, another interesting sector with potential for growth is the property management technology sector, which is being fueled by the tech-native Gen Z generation, who are transitioning away from their family home and into rented housing. In the UK alone, hundreds of startups have developed various platforms for property management.
The increasing availability of VR and AR technology, as well as its integration with mobile devices, are also accelerating its adaptation in PropTech. Thanks to platforms such as ImmersionVR, users can view a property tour on any device, including a mobile device. By allowing users to navigate the property’s various rooms using their device’s screen, the platform enhances the customer experience. Additionally, their virtual reality tours include a floor plan to assist viewers in visualising the space through the use of photo-realistic rendered interiors created from the plans.
Health concerns associated with the pandemic have increased interest in home automation and the ability to conduct tenancy transactions virtually. Smart Space, a company based in the United Kingdom, has developed an app that enables users to remotely control their office space environment via their mobile device, while emphasising increased engagement in the workplace community, and also increased safety and wellness, by providing secure, hands-free access to the building.
The preceding examples offer a snapshot of the ongoing PropTech revolutions. With hundreds of PropTech firms in the UK and the number expected to grow to a thousand in the coming years, 2022 and the years ahead will be filled with innovation surprises. as the PropTech revolutions continues.