BREAKING PROPERTY NEWS – 14/03/2022
Daily bite-sized proptech and property news in partnership with Proptech-X.
Dexters acquires Howsy as it consolidates its digital lettings credentials
Recently, we reported that Howsy, a proptech solution focused on providing a better lettings journey for landlords and tenants, had been acquired by an agency. It has now been revealed that Dexters is the agency in question, bringing the six thousand plus tenancies into its already formidable lettings operation through the acquisition.
The strategic benefit to Dexters is that it now will have over 33,000 tenancies but it is the suite of technology and the automation that brings to the lettings vertical which will help it deliver huge efficiencies and extra profitability.
Andy Shepherd, CEO of Dexters, re-enforced why this is so important, explaining that Dexters are not just looking to gobble up lettings businesses, but the higher value is the automated digital structures to run these new volumes of landlords and tenants.
Shepherd said: “This acquisition of Howsy marks a key step in the implementation of this plan. Increased digitalisation of our London lettings business using Howsy’s innovative smart tech.”
From a wider perspective, it now seems that many property technology solutions, founded by wide-eyed entrepreneurs with the lofty ambition of globally scaling their solutions, are now meeting with the harsh commercial reality that, at some point, all businesses need to turn a profit.
It’s fine to enthral early-stage investors with decks outlining that with their technology they have a solution that will replace and improve the user experience of legacy systems. Howsy, in this case, believed it could reinvent the lettings play. In reality, despite huge investment, the business simply could not stand on its own two feet.
I am an evangelist for the digital transformation of real estate, cutting out paper and legacy systems and allowing humans to run their property empires more quickly and more profitably, but are we about to see a change in how this is delivered?
At present, distressed or failed property technology SMEs are holding fire sales when they run out of cash, which is not good news for investors but great news for the buyer. Could a better system be a new generation of proptech founders working alongside and with their final exit partners? If so, it could mean a better outcome for all.
Will the Bank of England interest rate rise to 0.75% on Thursday?
The Bank of England meets soon to decide if it will increase its lending rate. Many feel that it will increase the rate from 0.5% to 0.75%, which will make the cost of borrowing mortgages increase.
Whilst 0.75% may seem a low rate, only a few months ago the BoE rate was 0.1%. Some economists are talking about a 1% rate by May of this year.
When the Bank of England committee meets on Thursday to deliver its thoughts, it is clear that rampant inflation, the cost of living crisis and now the Russia situation, will all play a part in their thinking.
So, why does the cost of borrowing money matter? Well apart from the obvious, the housing market is extremely sensitive to the fluctuations of the cost of borrowing. More specifically as interest rates for mortgage lending have been rising since last December and the values of properties being sold are also rising, we may reach a point at which financing a property is just too high.
First-time buyers, who made up one in two of the buyers in 2021, may stop buying as they weigh up the costs of owning a property. Higher mortgage costs always dampen buyer sentiment. Add in the huge uptick in utility costs and the general cost of living, and it might be better to put off moving until house sale prices reflect the new reality of the 2022 housing market.
Currently, the artificial shortage of property is masking the way the housing market may unfold, as sensibly priced property is sold in a matter of days; but this trend may not continue if buyers get nervous that the asset they are about to live in is too expensive to finance and live in. Their thinking might be that it’s more likely to become a financial burden rather than the home of their dreams.
If you have a view – please let us all know by emailing me at [email protected] – Andrew Stanton Executive Editor – moving property and proptech forward.