The UK property sector has been hit with the full force of coronavirus, but while it has certainly packed a punch, it has opened up an invaluable opportunity to step into a more productive future for both agents and consumers.
The days of outdated and ineffective portals must become a thing of the past if the sector is to truly bounce back and deliver the more sophisticated digital offerings required for a new era.
Overdue digitisation must take place to allow the property market to innovate and better serve the needs of today’s buyers and sellers.
Consumer trends towards 24/7 access to news, products and services have moved way beyond basic non-interactive web-based property portals.
As such, mobile-first apps that make more property services accessible from one place will be key, so that agents and consumers can manage their sales and letting processes remotely and comprehensively.
Artificial Intelligence (AI) is a tool that can be used to enable radical improvements in efficiency, connectivity and market intelligence across the property sector.
As we begin our preparation to rebuild the sector in a post-pandemic environment, those that put greater trust in integrated AI solutions and bring technological innovation to their property offerings, will be best placed to come back fit for the fight. Here’s why...
The Catch 22 network effect
When it comes to the UK property portal market, the outdated legacy infrastructure upon which it sits is lagging far behind in terms of ‘disruption’ - a term rarely used and tellingly despised within the sector itself.
‘Evolution not revolution’ is the mantra but in truth, little has evolved in the last 20 years. The web-centric and low tech capabilities of property portals has been a hindrance to their abilities to move beyond offering basic property advertising, with user-value still primarily derived from property search functions.
The absence of any online interaction on these platforms, combined with focusing purely on property search (i.e. only the start of the long consumer property journey), has led to a large disconnect between the portals, home-movers and estate agents, with the latter two groups being vested in seeing transactions through to completions without the support of the former.
This over reliance on basic property search by the current portals causes them to charge ever increasing listing fees (while offering ever decreasing value) to estate agents in return for delivering very basic advertising services.
Furthermore, this ‘pay-to-list’ model requires a critical mass of both agents and consumers from day one in order to create a viable market because agents won’t pay to advertise unless there is a large audience of consumer traffic and consumers won’t come unless the portal has a high enough percentage of available properties.
It’s this Catch 22 element or ‘network effect’ that has protected the market leaders Rightmove and caused most new challenger portals entering the market, who have merely emulated their model, to stumble.
So what does successful evolution for the property sector look like?
Interactivity is key
Originally the property sector was founded upon the consumer and agent being directly connected throughout the entire property acquisition process. Then portals came along and became firmly rooted as the middle man in the equation.
While portals have undoubtedly served their initial purpose of enabling consumers to find a greater volume of properties with ease, they have also taken significant control over that valuable data and created a problematic disconnect with zero interactivity provided on the platform.
With social distancing-compliant remote transactions likely to become a new staple for the foreseeable future, consumers will become even more dissatisfied and confused with the inconsistent service levels prevalent across the sector.
This calls for a holistic market reset to the way connectivity between consumer and agent can be achieved at the start of their journey together, i.e. on online portals.
Innovative, mobile-first portals that integrate in-app tools to create interactive platforms can provide a single, seamless place where consumers can plan, manage and record their entire property journey while engaging with multiple agents, enjoying a consistent and unified digital experience.
Being pro-consumer is an absolute must
The integration of AI can enhance the consumer’s journey as well as giving a more effective platform for estate agents to differentiate by demonstrating their industry experience, knowledge and talents.
Interactive chat functions with a combination of layered tools that automate and expedite low level tasks will be massively powerful in truly making operations more effective. For instance, in-app valuation tools could empower consumers to instantly broadcast their valuation requests directly to multiple local agents and receive back a series of aggregated and standardised quotes in one place, for easy comparison and selection, removing the time, effort and stress of manually researching and filtering the market themselves.
Meanwhile, enabling the in-app scheduling of viewings, automating buyer or renter feedback plus integrating offer management and tools for step-by-step completion tracking would make the entire process more efficient, transparent and timely.
As an example of what’s at stake, up to 30% of UK residential sales currently dropout each year after offers are formally accepted, costing the industry and the treasury billions of pounds in lost revenue and stamp duty - not to mention the financial, practical and emotional impact on the vast army of disappointed home movers affected.
Platform design and data security must be built with the consumer front of mind, after all, fostering happy and satisfied customers also serves the best interests of estate agents themselves.
Those that look to offer innovation and value at every stage of a consumer’s property journey will come out on top. To truly remaster the marketplace, AI tools can be utilised to turn the consumer into an instant ‘virtual property expert’ - not so that they can compete with agents - but in order that they may be empowered to make informed decisions about the impending transactions that could have a major impact on their finances and future well being.
Transparency is key to trust
AI can be tactically used by market participants to graphically break down key sector data, arming consumers with a more distilled and intelligent breakdown of information via their smart device.
Improved connectivity and transparency, achievable by syncing buyers and sellers with agents and property lawyers, could prove crucial to improving relationships on the conveyancing side too, where currently consumers and agents alike believe that the reasons proffered for process delays are all too often nebulous and indefensible - while conveyancers insist that both they and the legal processes they oversee are misunderstood and underestimated.
Tech is no longer the foe
As the UK continues to grapple with Covid-19, the impact to agent’s livelihoods on managing the property deal process will prove challenging.
In response, even agents who were previously sceptical about the relevance of tech in what they describe as a ‘people-centric business’ are now increasingly looking to new technologies to help them get the job done.
At the forefront are tools to help provide safe arm’s length property marketing appraisals such as VR and live video chat for virtual valuations and viewings. But why stop there? Far more of the lower level tasks agents currently engage in could be moved online including eSignatures, viewing scheduling & feedback, offer management and sales progressions, creating more time for agents to demonstrate their expertise and help inspire the confidence of their consumer customers as we all adapt to the new normal.
Greater engagement, greater return
For agents in particular, the time has very much come to scale up their capability. As it stands, estate agents only typically transact with 5% - 10% of the applicants they process.
For example, a single branch may sell 100 properties a year, but could reasonably receive 1,500 enquiries for them - so in this example only 7.5% of those applicants would become customers.
It’s unlikely that agents will ever sell an ancillary service such as a mortgage or conveyancing package to the other 92.5% of enquirers with whom they have engaged and manually recorded into their contact databases.
It’s possible that an agent’s awareness of these low transaction rates explains why enquiries are often heavily filtered by the industry and - according to some estimates - this can mean that up to 40% of all consumer leads are not responded to.
But the nature of downloadable property apps themselves help filter out less motivated home movers who may be less inclined to visit the app stores. So it’s likely that these apps will offer agents a higher quality source of leads.
But better still, the new breed of mobile-first portals will use embedded attribution software to tie all applicants to their referring agents, so that when the portals themselves sell these services to the consumer they can pay out large commissions to the agent introducers, helping them to potentially monetise a much higher percentage of the applicants they process and in turn, this should promote higher levels of service and better response times to leads.
A brighter future
While of course the uncertainty around Covid-19 is here to stay alongside the challenging economic impact, businesses can and should turn to innovative technology to navigate these difficult times and empower them in the long-term.
Property portals that harness AI, mobile and tech in general, have the capacity to usher in a new and promising era for both the consumer and the estate agents alike.
The platforms that directly connect these two groups, offering interactive engagement, will come to the fore, as we all plan our property journeys moving forward.
*Mick Silver is the CEO of Moovshack