PropTech specialists Unissu earlier this year carried out a thorough analysis of the state of the market at present, which does an excellent job of laying out exactly where the sector currently stands.
The growth of the sector has been considerable in recent years. In fact, between Q1 2019 and Q1 2022, there was £47 billion of global venture capital investment in PropTech start-ups (of which around £3.5 billion has been in the UK).
PropTech has moved from being a niche sub-sector to being an established market in its own right, which is completely integrated into, and a part of, the property industry as a whole.
Some say it has now reached its natural ceiling, that the law of diminishing returns has started to apply as there are too many companies offering similar things. But I would dispute that. For me, PropTech will continue its exceptional growth in 2023, and here are a number of things to look out for.
A portal alternative?
Boomin definitely didn’t work and didn’t offer enough of a point of difference to the big 3 portals, but the desire is certainly still there for something different, for alternative ways to list properties that benefit agents more directly. Could 2023 see the birth of this alternative portal?
The recent revival of OnTheMarket, under the expert stewardship of Jason Tebb, has shown the value of a very agent-focused portal with an increasing concentration on tech. The next stage of this evolution could be just around the corner.
I have some thoughts and ideas on this. I have told a lot of leading agents and the feedback so far is that they love it. If you want to hear them too, email me directly at nat.daniels@angelsmedia.co.uk.
Quality over quantity
The argument that there are too many products out there offering pretty much the same thing to agents, with different bells and whistles, certainly holds some weight. And, as the cost-of-living crisis continues to bite, the market slows and things get tougher, the focus on quality products will be more important than ever.
When there’s less money to go around, agents and property people will want to know they are getting a good return on their investment and great value for money. They will become more discerning.
PropTech suppliers need to provide that USP, that quality, to really stand out in a crowded market. If you’re offering something that is of genuine use to agents and isn’t just a rehash of something that is already on the market (but done in a slightly different, cheaper way), you will likely find that they are receptive.
What they are tired of is being sold the same product by ten different suppliers. Those suppliers who showcase their quality and point of difference will thrive.
Plus, cheaper doesn’t always mean better, particularly when it comes to tech. While suppliers will need to price their products reasonably, they shouldn’t short-change themselves, either. Despite the tougher economic conditions, people will be willing to spend if they can see genuine value and long-term ROI from a product.
The importance of lead nurturing
When times are tougher, lead nurturing becomes worth its weight in gold to ensure you aren’t missing out on leads, or neglecting leads that aren’t yet ready to talk to you. Too often agents will dismiss a potential lead if they aren’t hot at that very moment.
But, by keeping them in your pipeline and your sales funnel, by contacting them at the point at which they are ready to sell or let, you increase your chances massively of turning that into a market appraisal and then an instruction.
And, with fewer leads to go around as the market slows, making use of existing leads in your database suddenly becomes critical.
So, in 2023, expect lead nurturing to be far more important in agents’ eyes.
Websites become the destination
I can see 2023 being the year when agents start to make their own websites the destination, rather than the portals.
To do this, agents will need to develop a strong brand and entice people to their website. Fill it with good-quality content, build a social media presence, introduce a newsfeed so consumers can keep up to date with the latest news.
There is a real opportunity for agents to become that hub of knowledge, that authority, and 2023 should be the year where agents put their websites – their online shop window – at the heart of that.
A greater role in planning and housing
A recent blog article from the Department for Levelling Up, Housing and Communities set out the desire from the PropTech sector to play a greater role in delivering the government’s housing and planning ambitions.
There is so much that PropTech can help with here – from tech to speed up home buying and selling process to tech that improves mortgages, conveyancing, planning and a whole lot more. The market is still ripe for digital transformation and evolution, so expect to see more movement from PropTech firms in the planning and housing delivery spheres.
So, there we have it. Feel free to agree, disagree, make your own predictions in the comments.
*Nat Daniels is CEO of Angels Media, publishers of Estate Agent Today and Letting Agent Today. Follow him on Twitter @NatDaniels.
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Some interesting thoughts here Nat most of which I wholeheartedly agree with. A major point of difference is portals- I feel that in the last few years the public has made it very clear that the Big 3 currently meet their needs- whilst it is not perfect and improvements could be made- they are unlikely to shift focus and rivals to their crown will find it near impossible to secure the market share/stock needed to capture and maintain the eyeballs.
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