‘Defence Against the Dark Arts: How to Improve the House-Buying and Selling Process’ Roundtable Write-up
Prepared by Patrick Brown, Head of Insights and EU Engagement at BPF
The BPF and the UK PropTech Association convened a Chatham House discussion among property and technology experts on to discuss how residential building transactions might be improved through technology adoption.
The discussion was timely, since the demands of COVID-19 had meant that a number of sub-processes in and around transactions had been altered during lockdown to permit transactions to go ahead. In a sense the crisis posed a potential accelerant to digital transformation trends that were present but which might have otherwise taken some time to manifest.
Time to Transact
Participants identified that the time taken to transact was often much longer than it needed to be. A number of reasons were identified for this to be the case.
In sales of residential property to consumers, it was surprising that a process predicated on Caveat Emptor did not seem to prompt more informed buyers. Agents and legal experts often needed to guide those purchasing or selling properties through the process. Further, there was a sense that the process was broadly unautomated.
Onboarding solutions that made the transaction process more visible to all parties were also seen as being beneficial in providing an accountability partner to all involved in a transaction.
Rarely was information collated in a systematic way, and there was institutional memory loss between times when a property was transacted.
Time taken to receive searches was highlighted to be an issue, but there was disagreement among parties as to whether this problem was apparent or real. There was acknowledgement that in some local authorities, staffing meant that searches were sometimes delayed.
Further, there were concerns that many purchasers would wait to initiate some aspects of the process that would tell them more about the property. The relatively low price of searches meant that frontloading them might prevent fewer late failures in transactions (where deal breaking issues might arise that prevent the transaction going through), avoiding nugatory costs and uncertainty.
Indeed, frontloading information was seen as being one of the benefits of the HIPs policy as had been introduced, but that it became commingled with other goals and objectives.
Initiatives such as PropertyMark had sought to make progress on improving the residential sales process, including a sales protocol designed to inform the data requirements at the start of the sales process and at its close.
Perceptions of Where Delays Manifest
There was some difference of opinion as to where the problems lay in respect of transactional delays. However, there was some consensus that:
• Conveyancers needed to become more au fait with technology
• Technology needed to meet use cases for conveyancers, and not just the consumer in order to obtain traction
• Conveyancing services had to some extent been commoditised (e.g. no transaction, no fee services; value add services on top of conveyancing) and margins driven down. There might have to be some acceptance that prices could increase at least in the short term if the process were more digitalised
COVID-19 as an Accelerant
Necessity had of late required that the residential transactions industry had had to accommodate change in a very short space of time. Some of the changes were likely to be quite ‘sticky’ and institutionally embedded by the fact that a) a return to normal was unlikely in the short term and b) the market would likely also have to acclimatise to different market conditions (with changes recently adopted proving difficult to disentangle from those adopted as a result of a slow market).
There was a general consensus that COVID-19 represented a time at which the industry could adopt fast tech in a slow market.
A particular case in point was the adoption of virtual tours/AR to showcase properties, which had seen a noticeable uptick as a viable technology as a result of COVID-19.
Conclusions and Next Steps
Emerging from discussions, the main conclusions were that:
• There was standard information that accompanied a domestic transaction and improving the speed with which that information was provided, and its reliability was seen as key to speeding up transactions.
• There needed to be closer attention on the user journey in real estate, and also on customer education to ensure that transactions were not delayed simply due to human agency.
• COVID-19 represented an opportunity to adopt new practices. However, the industry needed to be alive to the fact that some new practices might incur costs, some of which might be passed on to consumers.
Sarah Edmundson, Allstars Group
Bryan Mansell, Gazeal
Andrew Saunderson, Grainger
Abigail Grey, Grey and Co
Hannah Forkin, Grosvenor
Ross Cooney, Iamproperty
Mark Bentley, Immediate Past President NAEA Propertymark
Matt Prior, MHCLG
Susan Freeman, Mishcon De Reya
Alex Dobbs, Movinghub
Trevor Youens, MRI
Isla Kennedy, My Property and Home
Philip Farrell, Offr
Adam Fletcher, Residential Property & Secured Lending Farrer and Co
Jacqui Daly, Savills
Dominic Grace , Savills
Christian Woodhouse, Search Acumen
Emad Hefny, Square Seven
Kristjan Byfield, The Depositary
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