Government Initiative Refurbishes the Property Market
In 2015, energy company E.ON commissioned a poll of 2000 adults to find out what they considered to be the most stressful life events. When asked what life event had caused them the most stress, over 60 per cent of recipients said it was moving house. Surprisingly (or perhaps not), this topped divorce, relationship breakdowns and starting a new job. It doesn’t take an expert to explain why moving house can be such an ordeal. As well as preparing for house viewings and making a plethora of difficult decisions, the traditional property market is notorious for poor communication, due to the numerous different parties involved. Two years on, property transactions are still a major source of stress. . . but not if PropTech companies can help it. Backed by a new government initiative, UK PropTech startups could be on the cusp of a breakthrough.
A new home for innovative technology
As of this month, the UK’s HM Land Registry (HMLR) announced a new initiative in partnership with Ordnance Survey (OS). HMLR is responsible for national property and land records, and is turning to disruptive startups for the first time. The programme will be run by Geovation, an incubator set up by OS to fuel the growth of innovative young businesses. Each company chosen to enter the programme will receive £10,000 in funding and 20 hours a week of dedicated time. After six months, each company’s project will be assessed for commercial viability and, if accepted, the company will receive a further £10,000 to help their launch. So far, six companies have been selected. Three are focused on PropTech, and comprise GetRentr, which tracks licensing schemes for rental properties, Orbital Witness, which uses satellite data and AI to aid conveyancers, and AskPorter, a machine learning chatbot for facilities management. The remaining beneficiaries are three promising GeoTech companies. GeoTech uses information about the geography of a site to inform construction decisions, and is therefore a useful match for property technology. In the HMLR’s annual report, chair Michael Mire explained that, “digitisation will allow us to provide our customers with information and data that are renowned for their accuracy and usefulness.”
How will governmental support impact PropTech?
The willingness of HMLR and OS to encourage PropTech expansion indicates that official bodies are starting to see disruptive companies in a new light. Instead of viewing them as a threat, governing organisations are exploring how these businesses can answer long standing problems with incumbent services. The Land Registry’s commitment to new technology is likely to have a knock on effect within their customer base, which includes citizens, companies, government, lawyers, conveyancers and financial institutions. Although the transition to new techniques and different ways of working is unlikely to be easy, it could be highly beneficial. In terms of PropTech itself, the programme represents a stamp of approval – albeit a very selective one. Although there are many existing PropTech companies, the public announcement of specialised resource distribution could inspire similar startups to run with their ideas, invest in their own development and approach incubators like the one run by Geovation. As we have seen in the ongoing blockchain debate, government support is key if a technology is going to be successful. The announcement of the initiative is essentially a green light to entrepreneurs in the sector, and another nail in the coffin of legacy estate agents and their stressful systems. In light of PropTech’s growth, these existing companies may choose to follow a policy of collaboration in order to ride the tide of disruption.
Innovative technology strives for adoption, but without the support of influential powers this can be incredibly difficult. Motivated by economic improvement, the continued housing crisis and a desire to encourage startup development, HMLR and OS are stepping up to provide much needed resources. However, they aren’t exactly carrying UK PropTech over the threshold. So far, only three companies have been chosen for the programme, and while helpful, the funding set aside is by no means extensive. The startups involved in the programme have to prove their worth before receiving further attention. While this is a sensible system, it shows that they are still wary of making huge commitments. Still, these efforts to support growth in the land and property market signal a turning point for PropTech, and hopefully for the property market as a whole.
How else could government initiatives disrupt the evolution of PropTech? Is HMLR doing enough to transform the land and property market? How far will government support encourage the development of other PropTech and GeoTech startups? Share your thoughts and experiences.