17 Dec 2019
The power shift in the property market
From search through to sign-off, every stage of the property-buying journey has changed. Buyers are no longer at the mercy of estate agents’ scheduling, nor are they inundated with documents or restricted to tick-box financing solutions.
The residential property industry had remained relatively unchanged for more than 50 years. Now, factors like rising stamp duty are leading many to stay longer in their homes – it’s not unusual for homeowners to spend 10 to 15 years in a property. Today the homebuying journey offers greater speed, flexibility and access to information, and solutions for every unique need.
In our Buying a home in the 21st century report, we’ve taken a deeper look at what’s changed in the past decade and how these changes will affect homebuyers’ next purchase. We’ve interviewed experts in the field to understand new developments, spoken to entrepreneurs for their thoughts on where we’re headed next, and drawn on our in-house expertise to identify which changes will most affect our clients.
Modern solutions for modern challenges
Changes in the search and viewings stages are the most obvious. We now see buyers and sellers routinely narrow their search online against very specific criteria, and viewings are often scheduled and even conducted remotely.
Whereas in the past we’ve seen buyers beholden to estate agent opening hours, the advent of augmented reality and virtual reality has helped put power back into the buyer’s hands.
In all cases, the focus is much the same: convenience, customisation and client service. Estate agents are adapting to suit the client’s needs, operating outside of the traditional nine-to-five window. This means more face time between buyers and the people that matter.
The human element
The lending stage has evolved in a very different way. Much has changed since the banking crisis, and the open and sharing economies have given rise to new innovations in the lending space. But face-to-face interaction remains an immovable part of securing a loan.
High-street lenders and online platforms offer services for homeowners who typically have fairly standard income profiles such as a monthly salary or annual accounts. Our clients' income structures can be more complex, requiring specific expertise and tailored solutions.
For us at Investec, it always has to be a human who intelligently looks at risks and opportunities, backwards and forwards. Because negotiating complex transactions will continue to requirerelationships. And this is something that applies throughout the market and at all points in the transaction process.
Negotiating complex transactions still requires relationships. Understanding the role of humans and technology is critical to achieve the best result.
Ones to watch
Even with these changes, conveyancing, property surveys and the exchanging of contracts remain essential parts of the buying process. They’re also the phases at which reams of paperwork, together with constant back-and-forth, often slow things to a crawl.
Data analytics, facial recognition and even blockchain mean it’s becoming easier for buyers to sign documents, sort out stamp duty, transfer funds and swap contracts – with increased transparency giving better visibility into what’s happening, and where the money is moving.
Perhaps most significant of all is the fact that technology is enabling conveyancers to focus more on assistance and client service. We also understand that clients don’t want to be handed off to solicitors by their bank, but to have them there by their side to assist at all times.
The introduction of new technologies is an opportunity for conveyancing, property surveys and the exchanging of contracts to be completed faster than in the past. However, the biggest improvements are yet to come, as the market is still fragmented and the priorities of different parties are not necessarily aligned.
Read our guide to buying a home in the 21st century
Raising the bar
Though homeowners are less inclined to move than they historically have been, there’s never been a better time than the present to be in the market. Those looking to buy now have access to a greater range of services which let them focus their attention on their purchase – with less time on mundane or time-consuming administrative tasks.
Knowing the latest technological innovations and new business models is key. At the same time, human input is not going anywhere soon – and nor will it ever. As data collection and administrative tasks are increasingly being done by machines, the experts will be freed up to spend more time understanding their client’s needs and building solutions that match.
Negotiating complex transactions still requires relationships. Understanding the role of humans and technology is critical to achieve the best result – and that applies throughout the market and at all points in the homebuying process.
At Investec Private Bank, we work closely with senior private equity and venture capital professionals to make sure we’re delivering lending solutions that take into account their unique earning patterns and asset base. Our policy is to begin with a blank sheet of paper and build from there. In the current climate, we think the homebuying journey should be tailored – customised to fit every individual need.