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How are ‘PropTech’ businesses reshaping the property market?

31 Mar 2017

Digital technology has transformed many aspects of our lives, many for the better, and the property market is now no exception. Start-ups are currently combining property and technology sectors to make a new business that can survive in the modern tech savvy society. Also known as ‘PropTech’ businesses, they have transformed the real estate industry to appeal to our digital needs.

For many of us, the digital world has improved so many life processes. Thanks to ‘PropTech’, many people now begin their search for a property online, whether that is residential or commercial. The days of looking at photographs of a property in an estate agent window are slowly dissipating – technology platforms have made the process more efficient and have developed into powerful consumer tools.

This emerging sector first appeared on the UK market with portals such as Rightmove (2000) and Zoopla (2008), who have taken the market by storm and changed the way we buy, sell and rent properties. It began with these companies using digital resources to list properties online in a partnership with estate agents – buyers and renters can search for properties in their price range and by their preferred location, before using filters to narrow searches to a number of rooms, property type and mile radius. Like other industries, there was a clear gap in the market to go digital – it has made the property market processes more efficient and simpler, for example, and by appealing to consumer’s digital needs, buyers, sellers and renters can now stay connected when on the move, or in the comfort of their home.

Rightmove is currently the market leader with over 127.5 million visits per month, listing 1.1 million properties from across the UK. Zoopla achieves around 50 million visits per month, listing 927,000 properties. These have become central to the buying process for the property market, which has encouraged other PropTech businesses to try their hand at the game.

PropTech start-ups cut out the middle man in both residential and commercial estate agents. In today’s market, businesses looking for commercial buildings need to know their office place can be flexible. The rate that companies are now growing and adapting, it is only natural that their business plan can change month by month – where 10-15 year leases used to be the ‘norm’ for commercial property rentals, rapid growth in most industries now means shorter lease contracts are required for businesses in constant transition. One PropTech example for this is ‘The Office Group’, who now offer businesses lease contracts that allow them to move their business within 24 hours.

With a rise in the number of start-ups, not only in the PropTech sector, there has been a dramatic incline in the demand for office space – with market giants Rightmove and Zoopla both specialising in residential property, there proves a gap in the market for commercial PropTech start-ups. Many companies in the commercial property market have not yet made the transition towards digital in response to the residential transformation in the property industry – meaning they are getting left behind. Propeller, however, have made the transition and provide commercial agents with a centralised online platform to list office spaces and other commercial buildings. Tenants and investors can use the portal as a ‘one-stop shop’ to view commercial spaces that are on the market.

As the property market continues to transition into the digital world, the selling, buying and renting process has never been more streamlined. We question whether this digital transformation could lead us to being able to buy or rent a property with just a click of a button in the future?

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