Property well and truly has gone digital

Technology is taking over the world – if I think back 10 years how times have changed. A tweet back then was the calling sound of a bird, and now billions are sent each day to each other via some boheamth called twitter – which in itself is practically new in a corporate sense! Now some may sense that property has certainly not excelled in the technology arena but it is certainly playing hard to catch up. 

You’d have to have been in hibernation in the last few years not to have noticed the plethora of proptech companies that have sprung up, supporting and challenging the industry in equal measure. From companies seeking to take on the high-street estate agents to clever apps helping property owners to reduce energy costs, the sector is awash with dynamic young firms, many of whose founders have little direct property experience. But who are these new found proptech companies:


Virtual walkthrough is addressing a fundamental need within the property industry – the lack of tools to connect buyers and occurpiers with buildings. Connecting buyers on social media, mobile devices and over email with one aim – to provide a more compelling buying experience. It allows you to experience a property without setting foot in it, taking the experience to the next level from the simple photograph and with plans to expand from current LA and London offices it could be heading near you soon.
Pi Labs has been set up and launched as Europe’s first proptech accelerator which has invested in 10 proptech companies, has a mentor pool of over 100 people and seen one company seed £350k. The mentor part stands out to me, by giving back expert advice across a wide variety of sectors, as a way to give future proptech companies a fighting chance.
Appear Here feels like it’s been around a lifetime but in fact like the others it’s relatively new – you want space for your business short term then go to Appear Here, simple as! No risk in owning the asset but paid a fee to rent it out on short term leases to new and innovative businesses or simply pop-up shops for larger corporates. Fund raisings and global expansion have followed but shows that a simple idea can go along way.
Yopa is claimed to be revolutionising the estate agency market and too right to. Having sold a few houses I am unsure how the fees by estate agents can be justified – the amount of face time you get means they may as well be online. Offering fixed fees but all the services shows they are forward thinking in a very active market place and with national reach they cover everyone. It’s the future!
Over such a short period of time much has changed and in each sense they are significant advancements as the digital world integrates into the property world. It won’t and shouldn’t stop here and I imagine by this time next year there will be further advancements – and if I knew where I’d be looking at it myself. For those not digitally minded, embracing the above would be wise but it’s not the end – for example there will still need to be high street estate agents, they will themselves though adapt to the online challengers.

Feel free to contact me 0113 288 2276 or lee.a.wilkinson@uk.pwc.com if you wish to discuss this blog or anything relevant to property and construction.

Enjoy the weekend

Lee

The government raids the property sector

Last year Sir Howard Davies delivered a report – the report looked at airport capacity in the South East and what did it say? Back a new runway at Heathrow. I’m not going to say that is right or wrong, the point is that Britain needs more airport capacity, sadly due to our rail network air capacity needs to be dominant in the South East yet when the budget was delivered this significant infrastructure project was not mentioned. Odd!



Infrastructure was mentioned in the budget in the shape of Crossrail 2 (largely irrelevant to me as a Northerner but agree needed) and HS3 (thank god!). In the London centric world we live in HS2 seems to have been getting more priority but HS3 is more needed. It’s a joke that the cities of the North struggle with hourly connections yet in the South, similar mileage is covered at significantly high frequencies. One can hope HS3 doesn’t become another Heathrow – all talk and no action.



That was strike 1 in the budget swiftly followed by strike 2, another raid on the property industry with higher rate of stamp duty for commercial property transactions – talk about a kick in the teeth and well done to the BPF for criticising so quickly. With deal sizes large in London compared to the regions and the amount of Sovereign wealth it may dampen the market but in the regions it will dent it big style! And then to complete the phrase that things come in three, he then hit the PRS market with a 3% levy on stamp duty for second homes – because that will help tackle the housing crisis, put a dent in PRS initiatives.



So yet again the property industry plugs a gapping whole in Osborne’s finances – yet he’s still praised for helping recover the economy? Some would beg to differ. As coupled with this hard cash impact there is Brexit which is causing uncertainty in the marketplace and will do until a resolution is reached – either we’re in or we start the 3 year process of exiting – more uncertainy. Shouldn’t we be feeling positive in the market at the moment? Can’t think why we’re not!



The decisions taken was a blow to the sector and completely at odd with the direction of travel the Government was taking with the housing sector. This will not end institutional investors in the sector but wil, certainly curb demand and appetite.

Feel free to contact me 0113 288 2276 or lee.a.wilkinson@uk.pwc.com if you wish to discuss this blog or anything relevant to property and construction.

 

Enjoy the weekend

Lee

Crowdfunding in the property sector

Being a buy-to-let investor has meant decent returns over the past two decades but the life of a landlord is not without its stresses - and costs. You have to work hard to find the best areas for rental income and growth, maintain a property and keep it tenanted, but the biggest barrier to entry is finding the substantial amount of money to put down as a deposit to buy in.

So it should be no surprise that the combination of Britain's obsession with the property market and the rapid growth of alternative finance, has delivered new routes for investors to get into property, with both lend-to-save and crowdfunding offering a way in for as little as £10.

Crowdfunding is quickly became the alternative way to kick start your development and over the last two weeks alone I’ve had the pleasure of listening to two developers explaining how they reached out and were amazed by the amounts they were able to raise. According to crowdfunding research firm Massolution, in 2014 the global crowdfunding market grew by 167%, raising £11.3bn. Let’s be honest the number will continue to grow and the property industry accounts for a large slice of the pie. But let’s learn a little more:

• In the property world how do you reward the crowdfunders? To help keep costs manageable offering attractive interest rates may not be the best route so developers have thought of more innovative ways ranging from equity stakes through to part ownership of the actual development to longer term profit share upon sale of the development.
• Investors who can’t afford to purchase an investment property outright can have the ability to buy a stake in a property or a series of properties. Some investors receive a percentage of the rental income on the development.
• In tandem with the rise of equity crowdfunding property platforms, there has also been significant growth of peer-to-peer lending platforms. In property, peer-to-peer lending has been used to finance development projects and also to fund property purchases.

But is this something to be worried about – the rapidly growing fintech sector that is. One individual says “As a general rule, I would say the higher the returns a platform offers to investors, the worse the underwriting process will be.”


Whether or not you believe in who is investing in you, the matter of fact is that it is an alternative way to finance a project and until funding becomes more readily available. Those which have been set up by those who are inexperienced will be the first to fall when the property market starts to go sour, which might stop the nascent property crowdfunding market dead in its tracks. If this scenario eventually plays out, the wisdom of the crowd will truly be put to the test.

Feel free to contact me 0113 288 2276 or lee.a.wilkinson@uk.pwc.com if you wish to discuss this blog or anything relevant to property and construction.

 

Enjoy the weekend

Lee