The UK property market has been relatively slow to adjust to the digital age, but as Bob Dylan so aptly pointed out: “The times, they are a-changin’.” Stephen Little takes a look at some of the companies trying to shake up the industry
Technology is revolutionising the way we do everything – from the way we book a cab to how we order a takeaway.
The property sector is no different and there are now a raft of firms looking to shake things up.
Buying or selling a home can be a stressful and daunting process, but rapid improvements in technology are helping to make life that little bit easier for consumers.
Searching for a house couldn’t be simpler with the vast array of apps that are now available. Property websites such as Rightmove and Zoopla provide a wealth of information for the prospective buyer and you can even get an online conveyancer to sort out the legal paperwork.
However, the mortgage world has been slower to adapt to the digital age.
One of the reasons is that firms are encumbered with legacy systems. A lot of the technology they use is extremely old and it is a major investment for them to upgrade.
The mortgage market is also one of the most highly regulated and complex industries, so it is not just a simple process that can be automated.
Mark Lofthouse, CEO of technology company Mortgage Brain, said that homebuyers were also reluctant to use technology as buying a home is such an important transaction they prefer the personal touch.
He said: “People have no problem using technology when buying travel or motor insurance, but when it comes to a buying a property it is completely different as it is an emotional transaction.
“People don’t wake up in the morning and want to get a mortgage, they want to buy a home. They naturally want help when they are spending such a large amount of money and assurance it is all going to go through.”
Apps and websites
Apps and websites are taking the hard slog out of buying a home and can help you find a property, check out the local area and even get finance. Your dream property could only be a short tap away.
A good place to start your search for a home is on a property website such as Zoopla or Rightmove. As well as finding new properties on the market, you can also check out how much other homes were sold for in the local area to compare and set up instant alerts.
Another useful app for finding a property is OnTheMarket, which joined the online home selling market in 2015.
Online sites such as Google Maps or Google Streetview can help you explore the area before you have even visited.
You can even find out if your home is on a floodplain by checking the Environment Agency website. The Flood Risk app by Landmark for the ‘Know Your Flood Risk’ campaign can help you assess whether a property is at potential risk of flooding.
It is also a good idea to check the local crime statistics. Police.co.uk has interactive maps showing the approximate location of incidents reported to the police in England and Wales in the last month.
Once you have found your property you are going to want a mortgage.
A mortgage calculator such as the one on whatmortgage.co.uk can help you work out how much you will to be able to borrow on your income.
UKmortgages.uk.com and unbiased.com are useful tools for finding a broker in your local area who can give you the necessary mortgage advice.
Estate agents
In recent years there has been a boom in the number of online estate agents that you can use such as Purplebricks, EasyProperty and eMoov.
One of the first companies to come on the scene was HouseSimple, which launched in 2007 and has managed to establish itself as one of the leading online estate agents in the UK.
With HouseSimple you have the choice of three different fixed fee structures.
It costs £595 upfront, £695 if you pay when your house is sold and £995 for the “No Sale, No Fee” option.
Once you have signed up, an assessor will come round to value your home, take photos and create a floor plan.
The advert will then go on Rightmove and Zoopla and you can make arrangements for prospective buyers to come round and do viewings.
Alex Gosling, the chief executive of Housesimple, said: “We are focussing a lot more on technology than a lot of online estate agents do. Many of them will look at a similar house on Rightmove and then price it, whereas we will examine multiple data sources and value the house in a more scientific way.
“We do have a no sale no fee option. We don’t want people to think this sector is all about taking the money upfront and not caring about whether you sell or not.”
Paula Higgins, chief executive of the HomeOwners Alliance, said that while online estate agents are cheaper, just like the high street they can vary in quality.
She said: “An online estate agent might not be putting as much effort into selling your home as a high street one once they have got your money. As they don’t have buyers on their books they won’t be actively negotiating on your behalf – so they won’t get you that extra money for the sale.
“The big thing is that online agents don’t have the local knowledge that those on the high street have, so you might not get the best price for your home.”
[box style=”4″]
Top five property apps
Paula Higgins, chief executive of the Homeowners Alliance, lists the top five apps to help you buy home
1. Rightmove and Zoopla
You can’t have a property app compilation without mentioning the behemoths that are Rightmove and Zoopla. As the forerunners of the online property revolution it’s not surprising that both Rightmove and Zoopla have had apps for some time. As not all agents list properties on both websites it makes sense to have both apps when house-hunting so you don’t miss out on your dream home.
2. Sold house prices
This is a useful app whether buying or selling as it allows you to check the last price that a property sold for – or the prices similar properties in area sold for. There are a number of sites that show this information but the Land Registry – who are behind this app – tend to be one of the most reliable sources of house price information.
3. Knocker
Using GPS technology – and no doubt inspired by dating apps like Tinder – the Knocker app allows users to view all of the properties for sale in the local area – wherever you are. It’s synced with Zoopla so has a huge selection of homes and along with photos and property information you can also see floor plans and details on local schools and amenities.
4 .Cell phone coverage map
According to latest figures four in 10 of us can’t get mobile phone signals in our own homes. The Cell Phone Coverage Map app means you don’t have to be one of them as it allows you to check the mobile phone signal in any area – so you’ll be forewarned if you buying in a network blackspot.
5. Sun surveyor
You’d be surprised how many people prioritise a south facing garden when buying a house. If it’s important to you that your new garden will get the sun the majority of time use this app to determine when it’s likely to get the sun’s rays.
[/box]
Conveyancing
When you buy or sell a home you need a conveyancer or a solicitor to handle all the legal aspects of the process.
The conveyancer or solicitor will do vital searches with organisations such as local authorities or utility companies to uncover potential planning, drainage or access issues regarding the property.
As you can imagine, it is a long, drawn out process, which many buyers feel is too slow and complicated.
One company trying to make things a little bit easier for homebuyers is My Home Move.
Its eWay service allows users to manage their conveyancing from their smartphone, tablet or computer.
Accessible via an app, eWay sends instant push notifications when there are actions for clients to complete, and provides access to support materials, videos, forms and case documents.
Through eWay, clients can also photograph documentation using their smartphone or tablet and upload them to their file, reducing the need to post their documents.
Doug Crawford, CEO of My Home Move, said technology is speeding up the conveyancing process and making it more accurate, primarily because people no longer have to post documents.
“A client who opts to use a high street solicitor will be bound by the opening hours, appointment system and reliance on the postal service,” Crawford said.
“In comparison, online conveyancing provides home movers with a service that is quicker, more convenient and reflective of twenty-first century living. Today, clients have expectations that any service they interact with online will be smart, slick and hassle free.”
Higgins said: “It was only 10 years ago conveyancers and solicitor were still sending documents and letters in the post. What is brilliant about the move online is that you can easily confirm documents have been sent and received.”
Getting a mortgage
Trussle and Habito are two companies which are trying to shake up the mortgage market with their artificially intelligent (AI) mortgage advice services which remove the need for a face-to-face broker.
Both are free of charge and while marketed as ‘robo-advisers’, they still have a strong human element to their advice processes.
“Trussle is a business borne of my own frustration of trying to get a mortgage,” said the company’s founder Ishaan Malhi.
“I was really underwhelmed with the ability to find out what I wanted to know through the traditional routes.
“So I thought, why don’t we combine technology with the expertise and the customer service of the very best mortgage broker to make it available and accessible to everyone?
“Using technology means we don’t have to charge a fee as well. You get the convenience and efficiency of an online site and the expertise and hand holding of the very best mortgage adviser.”
Once you have keyed in your details for a mortgage the system works out the best deal for you. You also have the choice of speaking to an adviser on the phone.
If you want to proceed, Trussle will send the application to the lender. Trussle can also notify borrowers if a better deal comes along.
Habito’s system is also similar. Customers enter details about their personal life, employment and salary by answering a series of questions. The artificial intelligence then works out the best mortgage available for them.
Daniel Hegarty, CEO and founder of habito, said that human brokers were still important to the application process.
He said: “We use a unique combination of technology and mortgage experts who are always on hand to answer questions and that won’t change.
“However, over 90% of habito’s customers prefer using live chat to complete and submit their mortgage application over a telephone conversation, signalling a shift in how today’s consumers want to engage with their financial service providers.”
[box style=”4″]
Case study: Taking out a mortgage on a mobile
Ian and Sarah Gould recently bought a five-bedroom detached house just outside of Earlsbury in Buckinghamshire.
Both teachers in their forties, they have got two children and have switched mortgages a number of times.
They decided to take out a two-year fixed rate mortgage at 1.99% with Atom Bank after speaking to their mortgage broker.
“I like to have a fixed mortgage just so I know how much money is going to be going out of the account as I’m not really a risk taker,” Ian says.
Ian says that one of the main reasons that they decided to go with Atom Bank was because the app-based technology made it easier to see how the mortgage was doing whilst at work.
“I’m not someone who is easy to get hold of by phone or an email because of teaching. We were just about to take out a mortgage with NatWest then our broker suggested we try Atom Bank as they’ve got some good deals and it can all be done on an app. We decided to go for it straight away.”
Ian says that one of the biggest benefits of the app was that there were no paperwork hassles slowing the process down as all of the documents were sent online.
“As everything was scanned and sent through the app we didn’t have any post to deal with. This saved a lot of delays as we don’t have time to go to the post office because we are teachers.
“The completion happened on the phone. It was just a case of going into the app, finding the offer and then signing online.”
They found the whole process to be quick and straightforward.
“The app itself is really simple to use and has got some great security features which I haven’t seen before.
“I think this is the easiest mortgage we have taken out. There was a lot less paperwork and a lot less toing and froing.
Communication via email with Atom was excellent and the app has worked as well as I would have hoped, so we are really pleased. We will definitely be recommending it to our friends.”
[/box]
Is the future mobile?
The latest Deloitte Mobile Consumer Survey revealed that 81% of UK adults owned a smartphone, a mere nine years after the first one was launched. It also found that 63% have access to a tablet, while 76% of people have a laptop.
Despite the growth in mobile phone use the mortgage market has been slow to react.
Atom Bank is hoping to change this with its revolutionary app that allows you to take out a home loan on your smartphone.
You first have to go through a broker who then recommends a mortgage. Once you have done this you can download an app and log in with face and voice biometrics to track your application.
All updates and communication are done via the app and you can accept a mortgage offer with a tap of your phone. The app also keeps and stores all key documentation automatically and there is a support team on-hand 24 hours a day.
Maria Harris, head of mortgages at Atom Bank, said: “We don’t have branches, telephone banking or internet banking. Everything for the customer is housed in the app.
“Because of the prevalence of technology so much more is now done on mobile phones or tablets. Everything is 24/7 and that is now the expectation of consumers.”
She said that one of the main benefits of the app was the improvement in speed, which helped to lower costs.
“Nobody has done this before, even getting your documents digitally is new. When we issue a mortgage offer the customer accepts it in the app using biometric security. As documents aren’t through the post nothing gets lost.
“One of the main benefits of being digital is that you don’t have to wait for documents or batch processes. So if the intermediary sends us the document or we issue the offer it is sent out in real time. This speeds up processing, allowing us to pass on savings to the customer.”
Is it the end of face-to-face advice?
However, despite the recent growth in online mortgage firms and smartphone users, traditional advice in person still appears to be more popular when arranging a home loan.
According to research by technology firm EDM Mortgage Support Services, despite being the most technologically aware generation ever, 57% of millennials want face-to-face contact when they take out a mortgage, while just 26% said they would be likely to do so online.
The research also found that only 41% of millennials would be willing to use an app to buy a mortgage. Joe Pepper, managing director at EDM MSS, said: “Smart phones are still largely absent from the mortgage-buying process and the industry certainly hasn’t kept up in providing the technological experience that its customers enjoy elsewhere.
“It is clear that even millennials perceive mortgages as something that is so complicated and important as to require face-to-face explanation. Part of this could be because of the absence of technology that is up to the job.”
Lofthouse said that despite the rise of robo-advisers, there will still be a need for brokers and advisers.
“People have been predicting the demise of the broker for years and if anything it has all gone the other way.
“I think brokers will get smarter and use technology to help their customers more and more,” he said.
“More mortgages will be done digitally, but I don’t think you will end up with three-quarters of the market being done online.”
Ian McKenna, director at the Finance & Technology Research Centre, said: “We are a few years away from a situation where you have purely online mortgage advice.
“I don’t think we are yet at the stage when people want to remove human contact. The near future is about leveraging the best of digital advice with the best of human advice. Homebuying is a very emotional activity and people like talking to a person for reassurance.
“What you are far more likely to see is advisers making their services available over apps and through screen sharing.”
