London: home to one of, if not the most fascinating property markets in the world.
2014 in particular saw the commercial, but also the residential property market go into hyperdrive, with property values going through the roof and the London residential market alone hitting a valuation of £1.5 trillion.
We need replastering, not just another lick of paint
Given the vivacity of the market it is surprising, then, that we are an industry that has been slow to adapt to change. Much like in the financial industry, the slow and sometimes antiquated legal, financial and brokering sides of the industry are the cause of frustration, delays, and broken deals.
The property market has for a while been crying out for a make-over, and there is no shortage of people willing to take on the work and challenge the old brigade. The young professionals making the Capital the vibrant cultural melting pot that it is today are some of the biggest losers of the current system, being burdened with inflated rents and little hope for making a step onto the property ladder. However, they are ambitious, creative and daring and have a lethal weapon up their sleeves: technological know-how. London’s TechCity is buzzing with entrepreneurs busy re-modelling the foundations of the property market.
Bricks and mortar powered by tech
The conditions have never been better for budding property entrepreneurs: open-source, SaaS and cloud-based technologies have lowered the barriers of entry and allowed the creation of agile platforms that are able to adapt quickly to changing market conditions.
Through my work with Pi Labs - Europe’s first property tech accelerator that launched in October 2014 - I have been lucky to get the inside track on some of the most exciting new tech-based companies operating in the property space. We are currently seeking additional investment through Seedrs to create a £1.5 million fund that will invest in the most promising property-related start-ups over the next 18 months.
We had literally hundreds of applications from sparky young start-ups. In fact, we are seeing interesting developments in all areas of the property tech sector. One hotly contested space is hospitality and leisure, where, following the incredible success of Airbnb, we saw a lot of variations on the model, including AirSorted, which made it into Pi Labs’ first cohort.
We are also witnessing a lot of activity in property crowdfunding, unsurprising given the UK’s love affair with property, and the more stringent lending criteria from banks leading to more creative funding formats. On the legal side, technology is being developed that is set to make legal processes faster and more transparent by utilising tracking systems similar to what courier services are already using, and we are seeing similar end-to-end solutions coming up in the mortgage finance space
It’s all happening in the commercial space
On the other side of the spectrum, commercial property is without doubt a particular hotbed for technology innovation. The backing of Hubble, an office space search platform, last year has really spurred on development in this area. At the same time, both Zoopla and Rightmove are also building out their commercial property search offerings.
OfficeRnD is one of the companies under our wing that offers exciting potential. Through the use of a simple cloud platform it allows customers to prototype, plan, create and manage an office space without having to employ a designer or architect. Another company, Wilde Rooms, is reinventing retail property and online shopping by giving shoppers the chance to try on items found online in dedicated ‘bricks and mortar’ changing hubs before making a purchase. The industry is brimming with creativity and imagination, and we are here to help foster and build success stories.
While the industry is full of fresh talent breathing new life into the old system, we are now starting to see even traditional institutions taking on innovation. The Royal Institution of Chartered Surveyors (RICS), for example, is running a large-scale project called RICS Futures focused on preparing professionals in the industry for the future of working and living. All the signs are there to suggest that 2015 will trigger even more investment in the property tech space, thereby disrupting the status quo. The question is, will it be enough to challenge the old brigade? I believe the time is right - what do you think?
Faisal Butt is founder of Pi Labs