In this blog post, I thought I'd focus on where I think the UK property market will be headed over the next few years as well as the impact certain changes are likely to have on estate agents and their conveyancing counterparts. For an industry that's remained pretty stable for hundreds of years, I think a huge shake up is coming, and only those who are ahead of the curve are going to thrive whilst others will struggle to survive.
The property market has always been an important sector of the UK economy and is arguably one of the largest contributors being a £300 Billion a year industry. But over the last few years, it's undergone some significant changes – not just with the rise of new technologies and increased competition but changing customer expectations.
As such, those individuals operating in the industry will be forced to adapt to stay relevant or potentially lose out big time. Here's where I personally see some of the biggest impacts over the coming months and years.
Greater Transparency in the Buying and Selling Process
One of the most significant changes in the UK property market is the need for greater transparency in the buying and selling process and frankly, it drives me crazy how resistant the industry is to change in this area.
There's absolutely nothing rational or logical about failing to provide up front information to buyers. It's almost as if the world of selling property relies upon tactics similar to how a hunter might snare a wild animal. The bait is laid out, the trap is set, and now he lies in wait for the unsuspecting bunny rabbit to hop along and get caught in the trap with no way out.
Critics will think this view too harsh, but I ask you, how many buyers do agents typically deal with who are experienced in buying property? Precious few if you're like most agents I talk to. So how would they know if there's an issue with the legal title that's going to cost a fortune and several months of delays to resolve? And how would they know the chimney stack needs repointing, the gutters need realigning, and that "little leak" the seller hasn't yet got round to fixing has caused a dry rot infestation to break out which will set them back thousands?
The answer is, they won't. Not without investing hundreds, if not thousands of pounds in professional services fees only to be faced with a gun-to-the-head choice of take on a property which is not what you thought it was or lose the cash they've invested and walk away.
Not much of a win-win is it?
Stalwarts of the industry will chant "Caveat Emptor!" in unison and smile a wry smile which suggests that they went through it when they bought their last home (30 years ago), so its ok if everyone else has to suffer. After all, no point trying to change something as big as the housing market, right? And besides, everyone who tried before has failed haven't they? So, let's just not go there…
But is it really good enough to "hide" important details about the condition of the property or not to have a solicitor review the property title, or order searches in advance to help speed the transaction along?
"BUT – it costs money!" is the reply which suggests it's still ok to preserve the Status Quo despite all of its obvious flaws. And besides, isn't that where estate agents make their money…?
Enter to the centre of the stage the crisis last-minute negotiations where the deal is about to fall apart unless the expert agent swoops in to save the day by turning on the charm to work with both parties and keep them interested just long enough to get everything to an exchange of contracts…which is about the same time as their fee invoice is raised…
If we're honest though, that sinking feeling at the back of our hearts suggests the "ostrich" approach to selling homes isn't really all it's cracked up to be, and despite feeling validated for being able to execute hostage-negotiator style skills in times of high pressure, we know on the balance of probabilities, there's a serious chance we lose just as many deals as we save.
So the honest question to ask is – what's the impact on the agent's pipeline? All that work for months, mostly at the risk of financial outlay up-front, just to watch your rewards disappear in a puff of smoke because someone's emotions get the better of them and they pull out of the deal?
Wouldn't it be better to put your negotiating skills to the test earlier on and convince your client its worth stumping up some cash to put into the marketing and sales success of their home by committing to a seller's pack with searches and legal review, plus a condition survey? After all, we're talking about hundreds of thousands in property value, so these nominal costs are merely an investment into their overall success (and naturally yours too).
Changing Technologies
Whilst a lack of transparency has traditionally often left buyers and sellers in the dark about important details, the rise of new technologies provides an incredible opportunity to provide a lot more information up-front.
Blockchain technology has the potential to create a secure and transparent record of all property transactions, providing buyers and sellers with a complete history of a property's ownership, including previous sales and changes of ownership.
My belief is this increased transparency can help to build much greater trust between buyers and sellers and can also speed up the buying and selling process by reducing the time spent on due diligence – a more collaborative approach to the sale and purchase rather than the current adversarial "en-guard" stance – surely this has to be for the benefit of all concerned?
Including the agent…
Efficiency and Speed of Service to Clients
Where I see major changes coming will be the speed and efficiency with which agents deliver their services to both sellers and buyers.
As the younger, tech-savvy generations come of age and start buying and selling homes, their expectations will be for instant updates and far greater transparency in the process. Their ability to instantly access more information than ever before means they simply won't accept delays or being fobbed off by poorly performing actors in the industry.
In fact, if they are faced with this sort of a situation, they'll hit back hard – with scathing online reviews across more social media platforms than we've ever heard of – all of which can be poison for your brand and prevent you winning future business without you ever likely knowing about it!
So, investing in technology that allows such things as "one-click updates" would be a smart thing to do – the newer breed (and a fair proportion of the older breed too), don't need a ten-minute phone call to update them. Just a message that lets them know they're not forgotten, things are in hand and moving forward, and they know what to expect next.
These updates can be delivered via a range of channels, including email, text message and WiggyWam, and can help to keep buyers and sellers informed and engaged throughout the process. This helps reduce stress and emotional anxiety for buyers and sellers and can also helps speed up the transaction process by reducing the time spent on communication and follow-up by agents and solicitors alike.
And who doesn't want to save time on business admin…?
There's also the need for property professionals to become more efficient and speed up the delivery of their services to their clients. In today's fast-paced world, buyers and sellers expect their transactions to be completed quickly and efficiently, and property professionals need to be able to deliver on these expectations.
Navigating the pandemic taught us that the current system is broken as sales timescales extended beyond 5 months – it's not just unacceptable to your clients – it should be totally unacceptable to your pipeline too!
One of the key ways to achieve faster service delivery will be through the use of AI and software automation. Routine tasks should be taken off the table and that time freed up for prospecting for future business, carrying out property valuations and helping the individual agents to entrench their position into a "market of one" (if you don't know what I mean by this, you need to read Estate Agents Secrets by yours truly).
The Influence of AI and Cryptocurrency
Finally, the influence of AI could also extend to be used to create more personalised property recommendations based on buyers' preferences and behaviours. Perhaps the days of the agent's "Hot Box" and even their CRM system will finally be numbered as AI scales the ability to be able to match buyers' requirements on a more granular level.
It's worth saying however, that I will never believe AI can replace the very essential role of human interaction between estate agents and their clients. Nor should it – estate agency at its best is more art than profession, and only those who have served their time long enough in the role can truly appreciate the sentiments behind that statement.
Cryptocurrency is also starting to make its mark on the UK property market, with some developers accepting Bitcoin or other cryptocurrencies as payment for property purchases. Whilst the use of cryptocurrency for buying homes still relatively new, it has the potential to disrupt the traditional banking system and provide a more secure and efficient way to transfer funds – providing solicitors move with the times and have the technology required to facilitate the transfer.
That said, some of the instabilities in the crypto market could bring difficulties on the day of completion if a crypto coin plunges in value shortly before completion or even between the time the funds are sent from the buyer and are received by the seller. Plus, there's the duplication of fees for handing over the crypto from the buyers to the buyers solicitors, and for them to pass it on to the other side, before it eventually reaches the seller, which may prove much more expensive than current transaction charges.
There may also be implications for further red tape as some buyers and sellers may seek to circumnavigate the stamp duty system through untraceable encrypted cryptocurrency against the purchase price of the property.
All of this change will require agents to keep abreast of current practices, if they're to not just sound knowledgeable to their clients, but to bring the best of who they are to the table in service of them. By embracing new technologies, such as WiggyWam, AI and blockchain, and providing a more personalised and transparent service to buyers and sellers, the top UK agents can continue to thrive in the years to come.
I'd love to know what you think future changes will bring to the UK property market and the impact it will have on agent's and their businesses – leave your comments below to join the conversation.