WEEKLY NEWS ROUNDUP – 06/08/2021
A roundup of the week’s top property and proptech news stories in partnership with Proptech-X
- Consolidation in the lettings space as Propoly exits to LegalforLandlords
- The Matterport & Gores SPAC delivers huge IPO
- Cladding scandal refuses to go away
- Boomin gathers momentum, passing 6,800 agency branches
- Has the Private Rented Sector gone all Airbnb?
Consolidation in the lettings space as Propoly exits to LegalforLandlords
At the start of the year, we forecasted that there would be a lot of consolidation in the proptech sector and specifically in the lettings vertical.
The recent acquisition of Propoly, whose strapline is “An Integrated lettings platform that reduces admin, maximises revenue and provides transparency to all parties involved”, will definitely fit alongside the LegalforLandlords operation that has absorbed them.
In their press release, Sim Sekhon, founder of LegalforLandlords, is strident about the need to change the analogue nature of lettings with its multi-layered regulations and red tape. He fully embraces the need for everything that exists in the lettings world but sees extra revenue and profit through efficiencies driven by proptech and SaaS.
Of the sale, Sekhon says: “We need to automate processes to save time and money, but we also need to recognise that agencies need to grow and develop new income streams. Propoly meets these needs now and will do so even more in the future.”
As Gary Barker, CTO of Connells recently alluded to, tech is brilliant when there are known processes and outcomes. The timeframes for outcomes in lettings, such as onboarding, have come down dramatically due to the implantation of automated systems.
Under the sale, one of the two original founders will stay on in the form of Ray Kyrson. The other, Edward Gazelle, will move on to other projects.
The speed at which Propoly moved from start-up to exit shows that the proptech and fintech marketplace is moving at an ever-increasing rate, with a generally accepted timeline of 36 to 48-months to exit or IPO becoming more and more common.
The Matterport & Gores SPAC delivers huge IPO
Under the auspices of a SPAC agreement, Matterport and the Gores Holdings VI have now listed Matterport Inc on the Nasdaq.
Putting aside the rhetoric made in the first part of their official press release of the 22 July, CEO RJ Pittman, who is also the Chairman of the Board of Directors of the combined company, said: “Becoming a publicly-traded company is a strategic transaction for Matterport that strengthens our position as the market-leading spatial data company for the built world and propels the global property market into the future.”
“We’re at the dawn of a new era for what’s possible when buildings become data,” he said. “To capitalize on this extraordinary market opportunity, we plan to increase our investment in our customers’ success, scale innovation and R&D, and accelerate growth through our spatial data platform for the 20 billion spaces around the world.”
As a proptech analyst, founder, influencer, writer and investor who grows proptechs, I believe that the significance and enormity of this deal will not permeate until the usefulness of what this publically traded company can do is felt.
Real estate is entering its forensic stage where many talk about using and capturing data intelligently, but the reality is that the ability to truly see a property through 3D modelling is really the key to unlocking the analogue nature of the beast that is the property asset.
What we see we can measure. What we measure we can market. What we market motivates clients to pay hard cash.
Cladding scandal refuses to go away
Despite Housing Secretary Robert Jenrick expounding that properties under 18 metres in height do not have a problem when it comes to cladding, or other factors that make them a heightened fire risk, the major lenders are still sitting on their hands.
It was hoped that following the Government’s advice, sprinkler systems and monitoring would become a mainstay and go some way to addressing the problem, or at least allay the fears of many, for the 800,000 properties caught in limbo which can not be sold, re-mortgaged, or purchased.
But the Royal Institute of Chartered Surveyors is saying that the EWS1 forms that lenders require still have to be given until they update their policy. RICS says it can only update its policy when, as is expected in November, the Government changes its official stance on fire regulations.
So, tens of thousands of people in low-level developments and homes are left waiting. The Government are saying that there is no problem, lenders are leaning on RICS who survey the properties for lenders and buyers, who in turn say they cannot do anything until the government produces updated fire regulations. Four years after Grenfell and still many problems are unresolved.
In what is fast approaching a farce, the Ministry of Housing, Communities and Local Governments state that: “The view from the independent experts is that there is no evidence of a systemic risk of fire in blocks of flats, but excessive industry caution is leaving many leaseholders in lower-risk buildings unable to sell or facing bills for work which is often not necessary… This must stop and, in line with the expert advice, we’ve set out that EWS1 forms should not be requested for buildings below 18 metres.”
In truth, they hold the answer to unlocking the problem if only they acted on a new fire safety protocol for buildings.
Boomin gathers momentum, passing 6,800 agency branches
Rightmove, the heavyweight in the property portal space and also the oldest portal trading for two decades, has just announced that it is back on track regarding profitability. Though it would seem that the insurgent portal Boomin is doing just that…booming.
As a Proptech analyst whose job it is to grow proptechs, expanding your user-base is not a simple task, sometimes taking up to nine months. It’s not as simple as “build it and they will come”.
So, to have a strategic mass of estate agents in less than four months, during the pandemic, lockdown, a busy market, agents on furlough, etc., is quite some feat. Especially as face-to-face cold selling of the platform to agents has been significantly impacted.
Founder Michael Bruce says that the company is well on track to gain the market share it wishes to grow to.
Since its launch in early April of this year, it has as Bruce puts it: “…achieved more agents than any other portal has ever achieved in that period. Rightmove took over six years to get to the number of agents we’ve got, and OnTheMarket took over five and a half years, while Zoopla took a number of acquisitions to get there.”
The real test ahead for the site is the adoption by the consumer, to see if the Boomin brand is a hit with the general public. Two decades of solid advertising and brand awareness campaigning by Rightmove means there is a big hill to climb, but Boomin’s USP is that it does property differently. We’re certainly in need of something a little different right now.
Has the Private Rented Sector gone all Airbnb?
There’s a lot going on in the PRS, with tens of thousands unable to pay some or all of their rent, but the bigger story is Airbnb’s ongoing creep into the mainstream rental market.
Of course, owners of second properties or professional landlords with multi-properties can let to who they want and in a way they want. But due to the hugely lucrative ways that Airbnb can repurpose a nice little earner – after all the deductions and tax that landlords have to pay – into an asset that can produce a months rent in a week, severe problems for the sector may be on the horizon.
There are now areas in the UK where it is difficult to get a traditional tenancy if you want to stay in rented accommodation, as most of the rental inventory is hosted through Airbnb. This of course typically hits the lower-paid demographic looking for rental accommodation, and also those who are currently renting because they have contracts to work in certain areas.
As reported in The Times, the MP for Totnes Anthony Mangnall feels the situation needs to be addressed. He said: “There are just nineteen properties you can rent long-term in the whole of South Hams on Rightmove, yet there are 300 advertised on Airbnb in Salcombe, another 300 in Kingsbridge, a similar number in Totnes. Yet we have hospital staff who can’t find anywhere to live, RNLI crew that can’t live in the town they serve. This is starting to become dangerous.”
Further South West in Cornwall, it is thought that there are over 9,000 Airbnb-hosted accommodations, prompting calls for action to be taken against this practice. With the pandemic and month after month of lockdowns coming in waves, it is of course fair that landlords should be able to maximise their property assets. With restrictions in place, it’s not surprising that premium rates for very short term lets exist, though it’s not the solution to the problem, it’s compounding it.
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