Technological advances such as crowdfunding, peer-to-peer lending, online trust ratings and social media have revolutionised the way we buy and sell a property. Rob Ellice, CEO of easyProperty, puts these new trends into context for the sector at large.
We all know how estate agents are seen by most people in Britain. The latest Veracity Index survey of public trust in professions put us third from bottom – behind only politicians and government ministers!
But all this will change in the next ten years. In fact, estate agents will soon undergo a transformation so radical they will end up with an entirely different reputation – that of expert advisers, not dodgy salesmen.
The property industry is embracing the future – maybe precisely to shed the wheeler dealer image that estate agents have been saddled with for too long.
Over the past year the prop-tech sector has exploded, with all the big players rushing to scoop up the next generation of digital innovations, including apps, gadgets and new peer-to-peer technologies, with many more exciting developments set to arrive in the near future.
All this will certainly enhance the business of buying, selling and letting houses. But I believe that, more crucially, they will also help to bring greater transparency to the market, and finally rid the profession of its dishonest reputation.
The way estate agents have operated for decades – effectively being the middle man between buyer and seller, landlord and tenant, broker and borrower – has often left us open to mistrust, and made establishing an open and honest agent-client relationship notoriously challenging.
But new tech advancements on their way look set to really shake things up, from the way homes are marketed and sold, and how house-hunters are matched with properties, to even how mortgages work – and, crucially, the estate agent’s role in all of this.
We recently commissioned a report into future trends in the property market to explore how to adapt to these exciting challenges – and found that, by the 2020s, estate agents as we know them today could be virtually unrecognisable.
High street estate agent shops will likely be extinct, instead there will be multi-brand virtual reality cafes where buyers will be able to remotely walk around properties, and even touch and smell them. Buyers physically visiting dozens of houses in their search for a home will become a thing of the past with the virtual reality cafes existing in the interim as virtual reality devices gradually become a mainstream staple within the home.
So will the ubiquitous for sale signs, which will be replaced by invisible digital beacons which transmit the property’s details to suitable house-hunters as they pass by, even allowing them to see an on-the-spot 3D tour on their mobiles.
Meanwhile, new property search software using big data – where the entirety of a person’s online activity is used to build up a detailed profile of their lifestyle preferences and choices – will transform the way house-hunters are matched with their perfect home and neighbourhood.
Clients will be shown houses automatically based on the way they live their lives, even taking into account their hobbies, likes and dislikes, and even the distance from their favourite restaurants and travel links to their places of work.
It will mean that, far from feeling that estate agents are only interested in arm-twisting them into closing a deal, homebuyers of the future will come to value their agent’s input as trusted advisers helping them to find the perfect place for their family’s well-being.
Perhaps most importantly of all, though, is the way trust will be measured in this not-too-distant future.
By the mid-2020s, every individual and business will have a conscientiousness rating mined from their combined online behaviour and big data that will dictate how others engage with them – advanced algorithms will log and measure tens of thousands of online engagements and transactions across many different platforms and forms of social media.
People are beginning to understand that in the future everyone will effectively be a personal online brand and that their data represents their digital reputation, telling a story about their trustworthiness – or lack of it. These online reputations will be as important – possibly more important – than our credit rating, deciding whether people are trustworthy enough to do business with.
I believe this cannot come quickly enough for estate agents, because it will weed out the bad from the good in the property industry and help the majority who do business honestly regain vital trust.
It’s not the only way people’s conscientiousness rating will revolutionise the property industry.
In the rental sector, landlords will establish whether a prospective tenant has a history of non-payment or problem behaviour, while tenants will also be able to check out their landlord’s track record – introducing a new element of competition to the market where financial success will be determined by how you service your tenants.
Agents will be able to match buyers to reliable sources of finance based upon their digital reputation, lessening the likelihood of frustrating last minute collapses of sales chains, and making the whole process of buying and selling a home will become more transparent, faster and less stressful.
Lastly, the ability to measure an individual’s personal trustworthiness will help usher in the era of peer-to-peer or crowd-funding mortgages, another exciting new prospect for the next generation of homeowners.
With rising house prices and ever more stringent bank lending criterion, conscientiousness ratings will be used by first-time buyers to reach the lower rungs of the property ladder, circumventing obstacles such as a lack of deposit or a poor credit rating.
In the same way that today’s entrepreneurs reach out to project funding peer-to-peer sites such as Crowdcube, a would-be home buyer in 2025 will ask crowds of micro-investors to loan the money to buy a house, circumventing obstacles such as a lack of deposit or a poor credit rating.
This will be useful as it will allow first time buyers in particular to demonstrate an ability to pay to a mainstream lender and switch more easily to a bank or building society mortgage at the end of the term.
These are very exciting times for the property industry and personally I want to be at the forefront of the digital revolution coming in the next decades. For me the future cannot come quickly enough.
The global trends report – Property a 20:20 vision – commissioned by easyProperty in partnership with The Future Laboratory, consulted a panel of property and technology industry experts to predict the advances we can expect to see in the 2020s.
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