With London Tech Week on the horizon Avamore Capital are looking into how the PropTech industry is advancing to make the entire development process easier for our clients. As the technology sector continues to boom and more developers are entering the market, the two worlds are inevitably set to collide resulting in something quite unique for developers entering the growing housing market.
What is PropTech?
Firstly, it is important to define what PropTech is. In the simplest terms, PropTech is any technological advancement applied specifically to an action or process in the property sector.
The most relatable example is with a product such as Zoopla which makes it easier to connect the home buyer with the market place. Until very recently, PropTech has made greater progress in the B2C market linking customers with a product but now, as technology consumes every aspect of the industry, products are being launched with the intention of making life easier for the small-scale developer.
How does PropTech help smaller developers?
Historically, technological advancements make processes quicker, more efficient, and much easier for the user to execute. The inception of apps and software focused solely on the developer do very much the same. Whilst some larger developers may be dubious of such tools from an accuracy perspective, it is important to remember that those starting out with a stretched budget could benefit massively from the speed and agility these new products provide.
Take apps such as MagicPlan for instance. A user-friendly tool allowing any developer to create floor plans and predict building and renovation costs. It lets the user take a picture of a room, calculates the amount of material required for a specific renovation, along with the cost, and links them directly to the supplier. It streamlines the process and makes it easy to obtain key information from the convenience of a tablet or smartphone.
Similarly, the introduction of products such as One Dome make information readily available and accessible, contributing to more informed development decisions on the go. Not only does the tool give a house price valuation, but the user can also rely on the accompanying location guides to determine potential within the area as a whole.
How are lenders advancing to help the developer?
From another perspective, the introduction of tools such as Criteria Hub open up channels of communication between lenders and brokers, ultimately leading to an improved experience for the developer. Lenders can identify areas where advisers are looking for greater clarity which could become a valuable addition to improving their own client experience.
From Avamore’s point of view, the question has arisen as to whether we should follow suit and produce a customer app. Whilst it would ultimately open up a more efficient channel of communication it is certainly something that we will not introduce at the expense of customer service. If an app can speed up the time to make an enquiry and do the appropriate due diligence then this is a value add, but if it sets a precedent for faceless and rigid transactions, perhaps PropTech in this instance isn’t for us.
Does PropTech simplify the development process too far?
In the most basic sense, no it does not. People who are seriously considering investing in the property sector know that undertaking a housing project of any scale is not to be underestimated. The introduction of PropTech makes it easier for the developer to understand the feasibility of a project, makes information more accessible, and enables the user to make simple yes and no decisions with greater ease.