'Proptech' - What's the big idea?

proptech

The property sector – and the mortgage market in particular – are often perceived as being ‘behind the curve’ when it comes to innovation. Whilst technological changes continue to sweep through other sectors, the property sector has remained relatively unchanged. If we compare it, for example, with the retail sector, where e-commerce now accounts for around 15% of total UK sales (a figure which is rising), it could be argued that the mortgage space is ready for a shake-up. 

For a while now, the property industry has been seeing the emergence of ‘proptech’, a term that describes the fusion of property and technology. The arrival of high-tech, innovative property portals, such as Zoopla, Rightmove and most recently the online estate agency Purple Bricks, is already transforming the way that people buy and sell homes.

It could be said that the mortgage industry has some catching up to do. Now worth £1.3 trillion*, the UK mortgage market is still seen by many as somewhat archaic in its paper-heavy, complex and labour-intensive processes. Start-ups like Trussle and Habito are therefore capitalising on the power of technology to make the borrowing process quicker, easier and more cost effective for both consumers and intermediaries.  As a result, more and more innovators in the mortgage space are now realising the revolutionary effects that technology can have on their sector.

Meanwhile, a number of new mortgage lenders have emerged recently, including Vida Homeloans and Atom Bank. These fresh-faced businesses are rapidly increasing the speed and efficiency of traditional processes while also expanding the choice of products for intermediaries and their clients. These same firms are also making the most of online Document Imaging Processing (DIP) tools and apps, which is significantly reducing their use of paper.

Vida Homeloans, for example, doesn’t have a post room, reflecting the paperless nature of its service. A 24/7 case-tracking service for customers is another way that the company is leading the way in in the mortgage sector’s response to the proptech revolution.

The arrival of new, forward-thinking lenders like these is helping to bring improved products to the market and therefore signals an important shift within the UK mortgage industry. If existing players fail to make the most of the exciting opportunities created by this kind of technology, they run the risk of being left behind by the rest of the market and losing touch with their clients.