Three ways innovation can help to reduce inequalities in the UK housing market

  1. Alternative finance: alternative finance platforms, for example crowdfunding and peer to peer platforms are enabling investors to access opportunities, across geographies, and regardless of the time the investor has to commit. This reduces traditional barriers to investing. In fact, investing is becoming as easy as buying on Ebay. And the requirement for information to be made public can encourage more professional delivery, both for developments and buy to let investments. So, such platforms are already helping reduce inequalities for potential investors, and facilitating access to better quality, more professionally delivered homes. The tokenisation of real estate has the scope to catalyse this change.
  2. Information: information asymmetries have for many years affected investors, tenants and potential homeowners. But now, information is more readily available digitally, again at the click of a button. You can find out who owns what for free, via Nimbus. You can find out what the house next door sold for and what else is available via Zoopla or Rightmove, or use a data aggregator such as Property Data. And there’s a proliferation of proptech innovators using data more intelligently than ever before — interpreting everything from changes in the use of cannabis vs cocaine in an area, to what the use of particular dating apps says about current and future values. Specific algorithms draw on wide-ranging data sets to forecast which property owners are falling into financial stress, bringing together an owner who has a problem, with an aspiring investor who has a solution. Many of these impressive innovators are opening up the results of their work for free or via low cost subscriptions, meaning geographical restrictions and relationships are no longer such a barrier to information or opportunity.
  3. Management — the big inequality here historically has been in terms of standards, and costs. Policies ranging from more licensing to the Tenant Fees Act are creating an environment where professionalisation is essential. Innovation is also helping to reduce friction, improve efficiency and help meet tenant needs more effectively, reducing inequality of standards. For example, apps for tenancy paperwork are making the process more efficient and are also reducing costs — for landlord and tenant. Property management apps connect the tenant customer directly to maintenance providers, reducing office costs and enabling faster responses. Extending these micro-innovations in lettings, real estate is moving from being an industry that sells a product, to one that delivers a Service. And that means the dynamics of the market, and the industry will undergo significant change, delivering more of what consumers (tenants, at one end, and investors, at the other) want and need.

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Anna Clare Harper

Anna Clare Harper

Anna Clare Harper is a UK Property Investment Strategist, CEO of property asset manager SPI Capital, author and host of property & investment podcast The Return