Breaking Property News – 03/08/2023
Daily bite-sized proptech and property news in partnership with Proptech-X.
Coadjute says let’s share data, not documents: Revolutionising the property market
My day job as well as being the owner and editor of Proptech-X and editor of Estate Agent Network, is working 1:1 with Property Technology founders, through my other company Proptech-PR ‘A consultancy for Proptech founders.’ What is key is that at any one time I get to have complete oversight as to what is happening in the real estate universe in the plan, build, sale, lease and management of property assets. And not just in the UK but globally.
Having previously been an estate agent for over 30-years, I do still have a soft spot for one part of this real estate ecosystem – residential estate agency, and with the Bank of England bludgeoning the industry into the ground, there really is a way for agents, brokers, lenders, conveyancers to band together and power the industry in a collaborative way that will get more property deals completed, faster improving everyone’s cashflow and consumer UX.
That is why one of my major clients is Coadjute – they get it, everyone is complaining that the legacy system of estate agency is grindingly slow, from government ministers, all the stakeholders and the public themselves but to mis-quote Boris Johnson, ‘the herd – has not moved’. Well if there was ever a time for ‘the herd to move’ it is now because for the foreseeable future cash flow, conversion of pipelines, the lifeblood of agencies and related businesses is going to be under enormous pressure – that is where a universal panacea like Coadjute comes in, it knits it all together.
The following is some thought leadership written by Hugh Davey for Coadjute and first appeared on the 17th of July 2023, it is well worth a read, and it is also worth reaching out to Coadjute’s CEO Dan Salmons or its COO John Reynolds who I know very well. Because they really can help you win big in these very turbulent times.
As everyone knows I am not a reseller, so if you do use Coadjute I do not earn a fee, so my backing of them comes from seven-years of researching over 1,000 proptech solutions and engaging with over 800-founders, and having had over 100-clients in the proptech sector. And my instinct for what good looks like is very much Coadjute shaped.
Hugh Davey’s take on things,
‘Documents have dominated the property market for as long as most of us can remember. From title deeds to local searches, mortgage offers to surveys, the amount of documentation required to buy or sell a home is staggering.
And of course, sharing, accessing, and handling the constant conveyor belt of paperwork and PDFs adds a great deal of stress to the property transaction process. On top of this it opens the door to a number of issues, including data duplication, rekeying of information, inconsistencies, fraud, and forgery. The list of potential problems goes on and on, as do the documents!
Could sharing data instead of documents be the answer? The reason we ask this is simple, and it’s not just a question of semantics. Documents and data are not the same thing. While documents do contain data, the information is trapped on paper or PDF in a snapshot in time. The only way to use it in another form or for another purpose is to manually move it by writing it in another form or typing it out. However, were that same information to be stored as data, that data is only entered once and is able to be reused many times across the property transaction.
In this article, we’ll discuss how a more collaborative approach to sharing data in the property market can increase efficiency, transparency, and security. The steps we are taking to make this possible, as well as how it will make everyone’s experience easier, faster, and more enjoyable.
The advantage of sharing data
Get the right information at the right time Data is fluid, not static like a document. It can be easily refreshed or updated to reflect new information. As a result, everyone involved in a transaction can make informed decisions based on the most up to date information available. This capability is essential for property transactions where time is of the essence. Gone would be the days of asking to the latest version of a PDF of a document.
Everyone can see what they need to see Physical documents need to be reprinted to be shared which can lead to incorrect or outdated information being passed around quite quickly. When all parties have access to the same real-time data, everyone is on the same page. As a result, errors, delays, and discrepancies are reduced, if not eliminated. Additionally, each party can access the information they need without having to wade through endless emails and PDFs.
Security is at its heart For all the good intentions in the world, documents can be lost in the mail, erroneously attached to emails or lost from email chains all-together causing delays and stress, and you can never be 100% sure where the information has come from. When the data is moved across a secure form of blockchain, like with Coadjute – you can see where the data came from and verify it independently.
Designed to facilitate collaboration and interoperability Data is made for sharing. By sharing information stored as pieces of data and not documents, that data is only entered once and is able to be reused many times, across all of the forms required to complete a property transaction. Accessing, sharing, and exchanging the property data across multiple platforms and systems—seamlessly.
Why is data not being shared more openly today? It’s a good question. There are a number of reasons for this, let us explain.
Fragmentation abounds – they say it takes a village to raise a child, and the same can be said when completing a property transaction. The process involves many parties and as each has their own systems, motivations, and ways of doing things, sharing data between them can be challenging—to say the least.
Standards are lacking – until now, property data has been fragmented and inconsistent across the various systems and platforms used by property professionals. As a result of a lack of industry standards and in some cases outdated technology it has been difficult to synchronise and share information seamlessly.
Security concerns remain – property data often contains sensitive information about individuals and their finances. Without a secure or standardised way to share data, regulatory and legal concerns are always top of mind. And rightly so.
What can we do to make data sharing easier? Firstly we must overcome the issues that make sharing data difficult. With our network, we’re making data sharing easy, safe, and secure across all systems and platforms through the latest technology.
However, we’re not just doing this on our own; we’re partnering with industry leaders who are also trying to make a difference. For example, we are collaborating with The Home Buying & Selling Technology Group (HB&SG) to support the implementation of the Property Data Trust Framework by addressing siloed systems, closed platforms, and a lack of trusted standards.
We know real-time data sharing is the future of the property market and we are committed to making it a reality. Just this week in fact, we launched our revolutionary Digital Property Data Pack, which is set to drastically reduce property transaction times and spur innovation across the industry.
By collating data from trusted sources across the market, such as HM Land Registry, Sprift, and Groundsure, we enable sellers to automatically complete and share property information with other parties. Our pack is the first of its kind on the UK property market and brings with it unique capabilities:
Standardised access to open data It’s the first pack that fully implements the Home Buying and Selling Group’s Property Data Trust Framework (PDTF), ensuring data is standardised for everyone.
Seamless sharing without rekeying It allows data to be shared and uploaded in a format other than PDF (for the first time in the UK), meaning that it can be entered by a seller and uploaded and forwarded to a conveyancer’s system instantly.
View in the format of your choice At the click of a button, the pack can be viewed in a variety of standard formats, from Law Society TA6 to BASPI to proprietary formats.
Trust built on provenance of data The pack gives users complete transparency, allowing them to see and compare what different providers think each field of the form should be for each data point (known as provenance).
Data sources are infinite Data can be populated automatically from a potentially infinite number of data sources on Coadjute’s open network. And this is just the beginning. The range and depth of data available will continue to expand as our ecosystem grows.
The Coadjute Digital Property Pack is now available to all users of the Coadjute network, so don’t miss out on the property market’s data revolution.
This full article was written by Hugh Davey and first appeared on the 17th of July 2023.
Zoopla‘s view on latest interest rate hike to 5.25%
Richard Donnell, Executive Director of Research at Zoopla comments:
“Although the base rate has increased further today, it’s not all doom and gloom for the housing market. There are signs that mortgage rates are peaking and 87% of mortgages are on fixed rates. For homeowners and would-be buyers who are impacted by mortgage rates, it’s important to note that the impact is not uniform across the UK.
Higher mortgage rates hit harder in higher value markets in Southern England where a larger deposit and income are required to buy with a mortgage. In contrast, in the north of England and Scotland, house prices are still rising as the impact of higher mortgage rates is less pronounced. In certain areas in these regions, it’s also still cheaper to buy than rent at 5.5% mortgage rates.”
What higher interest rates mean for the housing market Richard Donnell – The UK base rate continues to increase but mortgage rates are close to peaking. Higher mortgage rates don’t have the same impact across the housing market so the outlook depends where you live.
Base rate rises but expectations soften The Bank of England has raised rates again to 5.25% in an effort to reduce demand and cool price inflation. City expectations of how much higher interest rates need to rise have moderated in recent weeks. Most expect only one or two more small increases rather than the need for base rates to rise above 6% which was the view a few weeks ago.
Mortgage rates for fixed-rate deals are close to peaking This cooling in market expectations for base rates has led to a fall in the underlying cost of finance for fixed-rate mortgages. Some banks have already started to reduce mortgage rates as a result. These are modest reductions so far, but a sign mortgage rates are peaking. We expect mortgage rates to fall further in the months ahead but how much depends on the outlook for inflation and what this means for City expectations for base rates. We could well see sub 5% mortgage rates return this autumn.
87% of mortgagees on fixed-rates The vast majority of people buying homes in recent years have taken mortgages with fixed-rates. Almost 9 in 10 outstanding mortgages are on fixed-rates meaning today’s rate rise will not have an impact on their monthly repayments. However around 15% of mortgage holders will see their fixed deal come to an end in 2023, meaning the need to refinance onto higher rates and pay an extra £200-£250 per month on average.
The remaining 13% of mortgagees are on variable rates which means higher mortgage repayments straight away. The fact over 1 in 10 loans are on variable rates probably reflects those with smaller loans where changes in rates have a much smaller impact on their monthly repayments.
Jump in borrowers paying down mortgages Households with access to savings are paying down mortgage debt at a much faster rate as they look to reduce the impact of higher rates. This trend is being exacerbated by lower savings rates which makes paying down debt more attractive, especially for those who are higher rate taxpayers. Mortgagees are paying down an extra £2.2 billion a month over and above regular debt repayments, 66% higher than the 10-year average.
Higher mortgage rates do not have a uniform impact The rise in mortgage rates has hit demand from new buyers by 18% over the last 2 months. Sales have also slowed but we haven’t seen a drop in activity as severe as the period immediately after 2022’s mini budget. Home buyers are accepting that we are returning to a period of more normal mortgage rates in the 4-5% range rather than the ultra low, sub 2% mortgage rates of recent years.
Higher mortgage rates hit harder in higher value housing markets where the size of the mortgage is larger and buyers need a larger income to buy. Our house price index shows prices falling across southern England as the hit to buying power pushes prices lower.
However, in the north of England and Scotland house prices are still rising as the impact of higher mortgage rates is less pronounced. These trends are explained by the income needed to buy and how accessible the market is for first-time buyers. It’s cheaper to buy than rent at 5.5% mortgage rates across lower-value housing markets in the north of England and Scotland. In contrast, in southern England, would-be first-time buyers face much greater challenges which weakens demand and keeps house prices under downward pressure.
House prices to fall 5% over 2023 (but still 15% higher than pre pandemic) Higher mortgage rates have reduced the buying power of households and this will need to be reflected in house prices which fell at the end of 2022 but started to increase this spring as mortgage rates reduced to 4%.
Now mortgage rates are rising again we expect further modest price falls in the second half of 2023. Overall we expect the average UK house price to fall 5% over 2023 but they will still remain 15% higher than the start of the pandemic.
The longer term outlook depends on the strength of the economy and labour market and how long mortgage rates remain over 5%. We expect house price growth to remain very low over 2024 and into 2025 as the market adjusts to higher borrowing costs. There is no quick rebound in prospect as mortgage rates start to fall and anyone serious about moving needs to set their price carefully if they want to move home’.
Andrew Stanton Executive Editor – moving property and proptech forward. PropTech-X
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