How property technology could help solve the UK’s housing crisis
Home is where the heart is. It is also one of the most pressing issues in the UK right now. House prices have been rising unchecked for decades.
Meanwhile, there aren’t enough to buy and a significant proportion don’t meet the standards of quality laid out by the government. But while the UK housing crisis is high on the political agenda, it’s often misunderstood. The Centre for Cities, a think tank, reckons that Britain isn’t dealing with a single crisis, but lots of localised ones, with each densely populated area in the midst of its own shortage.
Against this backdrop is the ever-scaling landscape of proptech, the raft of companies that offer digital solutions to processes applying to property and real estate. In Europe, these brands have been thriving, reaching 45 per cent average annual growth in investment between 2014 and 2019, according to PriceHubble. It’s ramping up in the UK too – in 2021, investment reached a record £1.6 billion, a figure that quadrupled from the year before, according to VC firm Pi Labs. The burning question then, is this: will this wellspring of innovation help to alleviate the sector’s biggest problem?
Bottom rung boosters
At this stage, I’m prepared to think it might. The average house in England costs nine times over the average salary (it was 3.5 times in 1997), the Investors Chronicle reports. So affordability is a major issue impacting the economics of the housing crisis. The spiralling price of property has encouraged entrepreneurs from proptech and fintech to come up with solutions that make ascending the first rung of the housing ladder more realistic. That means getting a mortgage agreed.
Haysto is one company making this possible for people. While major banks usually turn away those with bad credit, who are self-employed or who haven’t earned consistently, Haysto connects customers to specialist lenders who are more lenient.
Generation Home is another scale up that is trying to clear the path to homeownership. It offers products such as a ‘deposit booster’, an interest-free loan intended to beef up the amount of capital buyers have to put toward a down payment. Kettel Homes offers a similar service, but defines it as a rent-to-own system. This involves the company buying you a house and letting you rent until you’re in a position to buy.
Getting things moving
The housing market is famously resistant to innovation. That means things happen in the same way they always have – slowly. A number of proptech players in Europe are creating methods designed to speed up transactions. When sales can happen without hindrance, the rate of houses becoming available would likely increase. This approach is becoming a fast-growing sub sector of proptech called iBuying.
In Helsinki, Rive is a startup that is centralising everything one needs to flip a property. The service is designed to make selling homes faster, simpler and safer. It promises ‘instant purchase offers’, brokerage services, and uses AI to make everything go faster.
In Madrid, Clickalia promises an offer for your home in 24 hours and will buy it from you in seven days. It’s hard to know whether such ideas would ever take hold in the UK, but a more free-flowing housing market would help.
Technology rarely represents a cure-all for our deepest problems. And the housing issues faced by the UK are intensely bound up with economic trends, law and legacy practices. In the short term, proptech might help us live with the crisis, but it won’t solve the UK’s housing issues alone. Beyond this, the crisis requires prolonged government intervention, committed fiscal policy and more support for individuals. Time to start laying a new foundation.