Trend Spotter

Property & Technology: The birth of the silicon brick?

The amount of column inches taken up by ‘property’ is at an all-time high. In my mind there are two major contributing factors: the importance of property value to those who own property (often their main asset) and the increased transparency and accessibility of rich property data available to the public.

I can’t think of any moment in recent history when the value of one’s home has meant so much – to so many people. With interest rates at a record low and stock markets pedalling backwards, it is increasingly evident that there is nowhere safer than London ‘bricks and mortar’. It is not surprising that ‘property’ is hot news.

Once property information was the domain of the professionals: Chartered Surveyors and Estate Agents. With technological advancements, consumers are now empowered with various means to access previously guarded information. The barriers to entry no longer exist. Tools and apps show exact property values in pounds and pennies (e.g. Zoopla), predictive algorithmic programmes compile research results and make predictions on future movements, and consumers can view properties in 3D and take online virtual reality tours.

However this depersonalisation of information lacks the inclusion of nuance and particularity – and also there is no substitute for experience. All of this is necessary to put into the analytical mix. Pure computer analytics gives a very jaundiced and one-dimensional view.

Technological developments and the public’s obsession (or love affair) with property and its value, have led to the birth of the ‘online agent’ – aiming to change the property buying process. But what is this hybrid? The business model is a low-cost but low-service alternative to the traditional ‘high-street’ agency. The main USP is to save property sellers money by charging fixed rates (generally £495-£795 + VAT). A plethora has appeared over the past few years including eMoov, PurpleBricks, Tepilo, Hatched, amongst many others – all acting as the middleman between consumers by taking sales online, but leaving most the onus for the viewing, negotiation and effectively the whole sale to the owner.

In my view a lack of care by many traditional agents and failure to provide a proper service and an inability to innovate has spawned the online agency. The public’s perception of Estate Agency is that the quality of service is inconsistent and that traditional agents are not moving with the times. Innovation and change have come about due to frustration – why wouldn’t the savvy consumer look for a more cost effective alternative?

It does concern me that the perceived saving made from avoiding Estate Agents’ percentage of sales related fees could easily be a very expensive false economy. No stone should be left unturned to get the very best price but how can this possibly be done for £495? What is more – is the seller the best person to show and discuss his or her property? The emotional involvement is too close to home (excuse the pun) in an often-exasperating experience. And despite the screening technologies available they can’t have all the comparable intel, expertise and knowledge of a credible agent.

The online model may work in the lower reaches of the property market (sub £500,000) where the fees are already relatively low and don’t enable the agent to really push the boat out on marketing. But I can’t see it working in the London Prime Central market – as long a good agents continue to provide an exceptional service.

EAT: First appeared in Estate Agents Today, February 2016