Will a Housing Super App fix Property Transactions?? ????
Hello, Propertyverts! ??
Welcome to the Digital Bricks and Mortar Newsletter, your essential guide to navigating the tech-driven transformation of the UK property market. Whether you're a property professional, mortgage expert, software vendor, policymaker, regulator, or stakeholder, this newsletter is for you! ????
We cover the latest trends and innovations, from the current online property market's transition to a Digital Property Market, to the emerging AI-powered Intelligent Market and Immersive Propertyverse. ????
Thanks for reading Digital Bricks and Mortar! Subscribe for free to receive new posts and support my work.
In this newsletter, we explore the concept of a housing super app for the property market. It's reasonable to assume that consumers in the property market desire the same digital experience, simplicity, certainty, transparency, and security they enjoy in other aspects of their digital lives. If we take as the starting point the assumption that the Digital Foundations discussed in earlier newsletters in terms of property market infrastructure, data standards, trusted data, and digital identity are in place, then it's a small next step to envisage a housing super app. ????
There is ample evidence to suggest that consumers want to complete the entire end-to-end property transaction on a single platform with all supporting services seamlessly integrated. This newsletter explores the concept of a housing super app and where it might come from in the UK market.
Failing Consumers ??
In the early 1990s, before the internet, the process of buying a house was a physical endeavour where prospective buyers had to visit the town of interest, personally engage with local estate agents, and collect printed property details. The mortgage application process involved face-to-face meetings with bank representatives or brokers.
The advent of the internet revolutionised these processes. For the property market, websites like Rightmove emerged, enabling buyers to browse properties online, eliminating the need for physical visits to estate agents and significantly reducing advertising and printing costs for agents. Gradually, every aspect of the property market, including HM Land Registry and payment methods, transitioned to being an electronic interface. However, the development of the property market seemed to pause at creating electronic interfaces or consumer portals, with no further advancement to fully integrate and streamline the entire buying and selling process. ?????
Contrast this with the evolution in the travel industry. Here, aggregator sites like Expedia and Booking.com were developed. These platforms enabled users to plan entire holidays – from flights and accommodations to car rentals and insurance – in one seamless online experience. These sites combined multiple services into a single, user-friendly interface, simplifying the entire holiday booking process. ????
So why has the property market not experienced a similar level of aggregation? One key reason is the complexity of property transactions. Unlike booking a holiday, where services like flights, hotels, and car rentals are relatively standalone, property transactions involve interdependent services from estate agents, conveyancers, mortgage brokers, and lenders. Each service in a property transaction is intertwined with others, making it challenging to create a single platform that can effectively manage the entire process. ?????
Aggregating a property transaction requires a level of sophistication and interoperability that surpasses that needed for less complex services. To date, the absence of the digital foundations of the market discussed earlier, such as a cohesive property market infrastructure, standardised data formats, or trusted identities, has hindered the development of an integrated customer journey.
What is a Housing Super App? ????
A Housing Super App is an all-encompassing digital application that transforms the home buying and selling experience by aggregating every aspect of the end-to-end process. It is designed to alleviate the burden of coordinating and integrating various services traditionally involved in property transactions. It serves as a singular platform where consumers can connect, interact, and transact with all necessary parties, including estate agents, conveyancers, mortgage brokers, lenders, and surveyors. Additionally, the app could extend its functionalities to encompass auxiliary services such as moving companies and insurance providers. ????
A good analysis of what a Housing Super App might look like was completed by 11fS in their report 'Building the Future of Home Buying'.
The report sets out clearly the need for businesses to collaborate to create a seamless customer journey - 'Businesses need to partner with adjacent businesses to serve more of their customers' needs, more effectively.' ????
Housing Super App Case Studies ??
Before we look at the UK market, I thought it would be interesting to look at the US to see what is happening in the Housing Super App space.
Zillow Case Study
Let's explore the story of Zillow, a prime example from the US. Founded in 2006 by Rich Barton, who drew inspiration from his experience at Microsoft where he created Expedia.com, Zillow aimed to revolutionise real estate much like Expedia transformed travel. Interestingly, this idea came six years after the launch of Rightmove in the UK, possibly influencing Barton's vision for Zillow. ??
Initially, Zillow focused on providing detailed home listings and valuations, addressing the gap Barton noticed in online real estate information. Fast forward to 17 years later, and Zillow has become a leading force in the US property market, boasting a massive user base and substantial quarterly revenues. ??
In 2022, Zillow announced a new strategy aimed at tripling its revenue by 2025. The company's vision involves developing a comprehensive housing application that simplifies every aspect of the property process. This includes searching and discovering properties, renting, obtaining mortgage pre-approval, engaging in immersive property viewing, conducting in-person tours, purchasing, securing financing, selling, and overseeing payments. ????
The Zillow letter to shareholders in Feb 2024 sets out clearly that Zillow is going to fix the moving experience for consumers.
"Everyone who has moved knows how much time, energy and money it takes. We believe Zillow is best positioned to meet that need. To help solve this challenge, we set out to become the housing super app: a digital experience where all the disparate pieces of the gnarly moving process are integrated on one platform. The housing super app is here today. It's called Zillow. Zillow's housing super app empowers customers by delivering real estate data and education, a suite of Zillow-owned solutions, and a network of best-in-class partners at their fingertips." ????
Zillow's approach to building this super app involves various innovations. They're connecting buyers with local agents, offering integrated financing solutions, and simplifying property tours, akin to making a restaurant reservation online. Their growth strategy focuses on five pillars: enhancing touring experiences, financing options, seller solutions, integrating services, and expanding their partner network. ?????
A closer look at one of these pillars, the financing process, reveals Zillow have updated their portal to include a Home Loans tab for pre-approval decisions and direct connections with brokers, backed by their financial services company, Zillow Home Loans, LLC. This strategy of building or acquiring supporting services was further underscored by Zillow's acquisition of the Agency CRM system Follow Up Boss in December 2023. ????
Who will Build the UK Customer Super App?
The trend of Housing Super Apps in the United States raises a pivotal question about the future of the UK's property market: Are we on the brink of witnessing the emergence of a Housing Super App in the UK, and if so, who will build it? If the US is an indication, then the Housing Super App is likely to emerge from the Portal space.
Zoopla as Housing Super App ????
Zoopla, established in 2007 by Alex Chesterman and Simon Kain, embarked on a mission to revolutionise the UK property market. From the outset, Zoopla aimed to distinguish itself from existing property portals by utilising publicly accessible property data. This approach combined property searches with comprehensive research tools, empowering users to make more informed property-related decisions.
领英推荐
Over the years, Zoopla has emerged as the second-largest property portal in the UK. However, it holds a much smaller market share compared to its competitor, Rightmove. Zoopla's significant milestones include its floatation on the London Stock Exchange in 2014 and its transformation into ZPG PLC in 2017. A pivotal moment came in 2018 when ZPG was acquired by Silver Lake Partners for ￡2.2 billion. ????
ZPG has strategically expanded its portfolio by acquiring a variety of businesses. These include CRM systems Alto and Jupix, proptech startup YourKeys, data companies HomeTrack and Calcasa, and mortgage business Mojo Mortgages. In 2023, Zoopla adopted what could be seen as an initial step towards a Housing Super App model. This involved restructuring to amalgamate its diverse acquisitions under a new brand, HouseFull. The vision behind HouseFull is to 'create the connections that power better property decisions', fostering a more integrated property market that enhances home choices, experiences, and business operations. HouseFull's ethos is that by uniting its brands, it unlocks the collective power of software, data, and insights to advance the property industry. ?????
This strategy focuses on acquiring and integrating various businesses to build a comprehensive digital customer experience.
Rightmove as Housing Super App ??
For over two decades, Rightmove has remained steadfastly committed to the core value proposition of being a property listing portal. However, more recently, the company has started exploring new growth opportunities. ????
In November 2023, Rightmove announced a new vision to empower everyone with the confidence to 'make their move'. This vision involves a Consumer Pillar, which is where the concept of a Housing Super App would fit. ????
This pillar outlines a progressive timeline:
This approach articulates a clear property transaction value chain, encompassing stages like finding properties, mortgage facilitation, transaction processes (conveyancing and surveys), moving services, and property lifecycle management (renovations, energy, maintenance). ??????
Legislation Framework ??
Over the last 5 years, there has been an ever-increasing legislative framework for the protection of consumer data and the creation of better, more innovative consumer digital services. ????
In terms of protecting consumers, the General Data Protection Regulation (GDPR) legislation introduced in the UK on the 25th of May 2018 has transformed how companies in all markets have thought about their handling of customers' data. ?????
For consumers, the 2024 Data Protection and Digital Information Bill will give consumers more protections but also extend the open banking type data access to other industries. "The Bill enables the Secretary of State or the Treasury to make regulations requiring data holders to provide customer data either directly to a customer at their request or to a person authorised by the customer to receive the data, at the request of the customer or the authorised person. ????
Political ???
There is strong political will to enhance the consumer experience. This drive is evidenced by both new legislation and the establishment of the Digital Property Market Steering Group (DPMSG). Inaugurated in the summer of 2023, the DPMSG is a collaborative effort to transition the market from the existing electronic market to the digital market. The mission of DPMSG is to foster the adoption of digital technology in a manner that prioritises transparency, security, and consumer-friendliness. ????
Chaired by HM Land Registry, the DPMSG has senior representatives from a range of influential bodies including the Law Society, the Conveyancing Association (CA), the Council for Licensed Conveyancers, The Society of Licensed Conveyancers, the Solicitors Regulation Authority, the Royal Institution of Chartered Surveyors, the Chartered Institute of Legal Executives (CILEX), CILEx Regulation, the Council of Property Search Organisations, Propertymark, the Building Societies Association, and UK Finance. ?????
The group's vision puts improving the consumer experience at the core: "Through collaboration, innovation and a focus on emerging digital technologies, we will build on existing progress across the home buying and selling system to get a better result for the customer: simpler, faster, more certain and less stressful." ????
This vision is supported by a strong commitment from the organisations involved in creating a better experience for consumers. "The Law Society is committed to improving the home-buying experience for consumers and others involved in the conveyancing process." - Lubna Shuja, President of the Law Society of England and Wales ????
Inquiry on Improving the Home Buying and Selling Process ???
In April 2024, the Levelling Up Committee launched an inquiry on Improving the Home Buying and Selling Process. The second question of the inquiry relates directly to improving the consumer experience of Home Buying and Selling: "How could the consumer experience be improved during the process for buying and selling homes?" ????
The inquiry is cross-party, so it is reasonable to assume that all political parties in the UK acknowledge that the home buying and selling process is failing consumers. ?????
It looks like the legislative and political stages are set for the introduction of a housing super app to transform the customer journey. ?????
Conclusion ??
In conclusion, the current UK property market is ripe for the emergence of a Housing Super App that streamlines and simplifies the home buying and selling experience. The fragmented nature of the property transaction process, with each business vying for customer attention on their respective platforms, has resulted in a suboptimal customer experience. ??
Case studies from the US, such as Zillow, demonstrate the potential of Housing Super Apps to revolutionise the property market by offering seamless, end-to-end services. In the UK, both Zoopla and Rightmove are positioning themselves as potential contenders to become the UK's Housing Super App, with varying strategies and approaches.??
The legislative framework and political will to enhance consumer experience and data protection further support the development of a Housing Super App in the UK. The establishment of the Digital Property Market Steering Group and its commitment to improving the consumer experience signify a strong push towards a more digital, streamlined, and consumer-centric property market. ????
As the property market continues to evolve, the emergence of a Housing Super App in the UK appears increasingly likely. This digital transformation will set new standards for convenience, efficiency, and simplicity in the industry, ultimately benefiting consumers by providing a seamless, stress-free experience when buying or selling a home. ????
Subscribe to Digital Bricks and Mortar ??
This newsletter serves as a hub for property professionals, software vendors, policymakers, regulators, and stakeholders to engage in open discussions, and share insights. We focus on building the Digital Property Market and exploring the emerging AI-powered Intelligent Market and Immersive Propertyverse.
??Don’t miss out. Join the conversation today!
Versalis shift technician
6 个月Hi John I have reached out to you via private mail. I see this vision with my app Pineapple Nest Digital Estate Agency.