In the firmest sign yet that PropTech has entered the mainstream, Housing Minister Esther McVey recently launched an expert advisory council that the government says is ‘dedicated to the digital transformation of the property sector’.
In the first week of November, McVey – the former Work & Pensions Secretary – met with several key PropTech figures, principally to investigate ways of speeding up housebuilding and home sales.
According to a statement from the Ministry of Housing, Communities and Local Government (MHCLG), the new expert council will advise ministers on ways to support and grow the sector further, with the aim of making it cheaper and easier to plan, build and buy new homes.
Faisal Butt, a property entrepreneur and the founder and chief executive of venture capital firm Pi Labs, will be the first expert to sit on the minister’s new council. According to him, the body will explore the possibilities of new technology ‘across the entire house building and house buying journey’.
He added that PropTech firms are harnessing technology to make processes faster, simpler and cheaper, digitally transforming the whole of the property sector and placing much more information at the public’s fingertips.
The creation of the advisory council follows on from a roundtable discussion that McVey hosted with PropTech leaders in October.
The government is clearly recognising and even prioritising PropTech in the home building, buying and selling sub-sectors, and hopefully, lettings will be next.
Given the private rented sector’s growing size and influence – it is now the second most common form of housing tenure in the UK, the largest in London, and increasingly spans the generations – the lettings market will ideally be given equal billing by the government when it comes to digital transformation.
Further initiatives would be welcome
A few years ago, the government ran the Rent Recognition Challenge, a Dragons’ Den-style challenge which tasked PropTech entrepreneurs with creating a simple way for tenants to record their rent payment data, to help them improve their credit scores.
Launched in December 2017, the scheme provided an initial round of grant funding to six startups to help turn their ideas into a workable product, with an expert panel of judges then whittling the six down to three to receive a final package of government funding in August 2018.
While this competition shone a light on one area of the rental sector where technology can make a big impact, more such schemes would be welcome – with associated funding.
It’s positive to see the government taking PropTech seriously and appreciating the far-reaching effects technology can have but if they are truly invested in the digital transformation of our industry, this should also include lettings.
At the roundtable discussion in October, McVey unveiled proposals to encourage a digital revolution in the property sector by releasing data held by local bodies.
She said compulsory purchase order (CPO) data will be opened up for the first time, improving transparency, and will also enable PropTech firms to obtain information such as Energy Performance Certificates and the square footage of properties.
Additionally, a national index of brownfield sites will be created to simplify and improve the quality of ‘Brownfield Land Registers’ and help developers find suitable land on which to build.
At the roundtable discussion, attended by nearly 700 UK PropTech companies, McVey said: “The government believes that the PropTech sector is a growing industry worth £6 billion and is leading the world in the property building and buying market. The sector already receives 10% of global PropTech investment.”
She added: “We’ve had revolutions in the way that financial services, online banking and transport are provided, turning once unimaginable possibilities into everyday realities. Now it’s the turn of the UK property market.”
Positive words, hopefully to be followed by positive long-term action for all parts of the UK property sector – including lettings.
*Neil Cobbold is Chief Operating Officer of PayProp UK