What does proptech mean for the future of estate agents?

What does proptech mean for the future of estate agents?

The estate agent market needs to understand and appreciate that technological advances have loosened their stronghold over buyers and sellers of property

In this report, Rajiv Nathwani, Director of Quivira Capital, takes at look at why the estate agent market remains ripe for upheaval

Until recently, the property industry was reluctant to embrace new technology, choosing to remain invested in the traditional realm of estate agency. Yet in recent years, the traditional property industry has come under attack from the rise of proptech start-ups, with research from Begbies Traynor revealing that property companies’ transactions were 7.3 per cent lower in November 2016 than they were one year previously. This has led to estate agents’ share prices falling steeply in 2016 – for instance Foxtons and and Countrywide have fallen by 47.5 per cent and 56.9 per cent respectively in the last 12 months.

But what is proptech and what does this mean for the future of estate agents?

While the early birds of the property tech world, such as Zoopla and Rightmove, have quickly become old hats in the estate agent world, more and more start-ups have been appearing boasting unique offerings centred around streamlining the process and focusing more on helping the consumer rather than boosting their commission. In a diverse arena, which incorporates everything from data analysis to lending, areas that were previously disconnected in the property world are coming together.

Combine this with the government’s recent announcement to ban letting agent fees, and the estate agent and letting market as we know it is under severe threat.


This growth in property technology is largely due to the shift towards the human element of property - companies are invested in attracting a returning customer and good reviews, not just a quick commission. Take Purplebricks.com - the UK’s largest hybrid estate agency - which has seen shares increase by 20 per cent, despite the declining share values of its high street competitors. Being a hybrid agency, Purplebricks has shed the expensive offices and in-house staff, choosing instead to invest in freelance ‘property experts’ to offer sellers and buyers advice tailored to their area.

Traditional estate agents focus on commission, and for them the difference between £100,000 and £105,000 is very low in these terms, and therefore they are less inclined to push as hard for the additional £5000 on the price of a property.

The rise of technology doesn’t just benefit renters, who can use the technology to conquer admin such as booking viewings and reporting maintenance issues, but also provides landlords with a more streamlined system. Research carried out by Purplebricks revealed that 60 per cent of activity (bookings and viewings) happens when traditional estate agents are closed. Through using online portals landlords can stay on top of payments and issues 24/7, if they so wish alongside juggling their portfolio.

Furthermore, prop-tech is not only revolutionising the lives of renters, but it’s also fundamentally changing the way the buy-to-let industry will work this year and beyond. A really innovative concept is property crowd funding, which gives budding property investors the opportunity to start investing in property from as little as £100. Property crowdfunding offers a choice from a wide range of developments to make an informed decision that suits your investment strategy. When the total sum is raised, the platform will purchase the property and rent it out, meaning you will begin making a percentage of rental income immediately.

The property market has undergone an incredible shift from an opaque industry, controlled by local agents, to a transparent and accessible industry, due to internet expansion and the advent of proptech companies. The estate agent market needs to understand and appreciate that technological advances have loosened their stronghold over buyers and sellers of property.

Proptech companies allow people an alternative route into the marketplace, circumventing the traditional agents. Agents should learn to embrace the advantages and additional dimensions proptech brings to the table.

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Latest Comments

warren
warren 26 Apr 2017

You're very welcome Mary! Glad you enjoyed them :)

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Mary Ward
Mary Ward 26 Apr 2017

Thank you for the wonderful ideas. First impressions can make or break a deal. It's sadly that many homeowners drop the kerb to create an off-street parking space.

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Tony Gimple
Tony Gimple 14 Apr 2017

I'm not at all surprised that so many landlords are still confused about what the tax changes really mean and how it will affect them. In particular, the blind rush to incorporation is leaving landlords...

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MH
MH 13 Apr 2017

You are right that the bank holidays are going to be spoiled in looking for the properties. But people who want to sell their property and looking for the better relocation, they can get benefits of this...

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bnellyb
bnellyb 08 Apr 2017

There will be an exodus of private landlords over the next 5 years as tax changes take effect, private landlords provide an important service to the rental market, why do housing associations and councils...

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Fred Cassman
Fred Cassman 07 Apr 2017

"Make it look like you are at home": often people forget this and share on facebook their location!

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jared townsend
jared townsend 05 Apr 2017

It'll be interesting to see how & if the Government's asset sale regarding mortgages helps

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SecomTech
SecomTech 04 Apr 2017

...and not one mention of the rules on PERMITTED DEVELOPMENT!!! Unless you have studied the plans you will not know...It's probable a high proportion would not need planning permission...BUILDING Control...

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Jonathan
Jonathan 03 Apr 2017

That's a very interesting study indeed. There is no doubt that new services and web apps such as Wonego.com in the UK or Roomster in the US will change the way people look for a flatmate, and that tenants...

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MBM Homelets
MBM Homelets 23 Mar 2017

Although this is a very positive step, there is little or no guarantee of the standard of workmanship employed by the tenants. We have had experience of a professionally decorated property being ' painted'...

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ajay
ajay 21 Mar 2017

How is the "robust evidence" looking now?

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NathanG
NathanG 20 Mar 2017

I've been watching the series so far and am completely baffled by the cases that were presented. Though, I don't think that we can protect ourselves from every scam possible - it will just make the scammers...

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