The Future of Residential Property – Part 3

In the third of a four-part series, Dharmesh Mistry looks at the future of residential property through the lens of the biggest brands on the planet, envisaging how different the industry could be if new players applied technology to residential property development.

Can Property be Uberised?

When it comes to digital disruption, a favourite case study for management consultants is Uber who have made a global impact on taxi rides. The most amazing part of Uber is its platform business model which means that it owns no cars.

However, it is most famous for its customer experience, often described as “frictionless” because it makes the entire process from getting a ride to paying for it so easy. No more calling or messing around with cards/cash. What Uber did was to understand end to end customer journeys for both customers and drivers and remedied points of friction.

Whilst property development is a very different business as I have outlined in my previous two articles (part one and part two), much can be learnt about how property development could change by looking at disruption in other industries.

Through the richness of banking data, it is also possible to identify who might soon be looking to buy a house, something banks have been doing for years when selling mortgages.

Dharmesh Mistry

Buyer’s journey

Uber has carefully thought through the entire customer journey and made it really easy to order and pay for a ride. It also introduced the ability to choose whether you want a nicer or bigger car and whether you would like to save money by sharing a ride.

Uber made it easier to allow users to add a tip if they wanted to and to rate drivers. It’s not only ratings that helped to improve the quality of drivers and cars, Uber has employed staff to spot check drivers and their cars. The key point again is how they have looked at the entire journey and sought to remove points of friction and add value.

New property sales typically start with listing a new development on the company’s website and some of the sales portals. However, the customer journey can start much sooner with trying to find a location that meets certain criteria like transport links or schools, or it may start with trying to understand affordability. Here, content and tools like www.prospectgenerator.co.uk can be embedded into property developer websites to catch these starting points. This allows property developers to engage with customers much sooner inevitably giving them a stronger opportunity to turn prospects into buyers. 

Through the richness of banking data, it is also possible to identify who might soon be looking to buy a house, something banks have been doing for years when selling mortgages. With Open Banking this data is now available for any company that can provide a compelling solution for prospects to want to share their banking data with you. For example, using Open Banking property developers could help prospects create a budget for their new home.

Uber's app provides unrivalled engagement, before, during and after. Will residential property benefit from a similar service in the future?
Uber’s app provides unrivalled engagement, before, during and after. Will residential property benefit from a similar service in the future?

Engagement

Another key feature of Uber’s app is providing feedback to the customer both before the car has arrived, so they are kept up to date on the estimated time of arrival, and during their journey to show when they should complete their trip. This keeps the passenger engaged and in the future, Uber could use this to upsell, for example, to pick up food on route or use a 3rd party offer like a special discount within a shop on route.

It is a well-known statistic that about a 3rd of property sales fall through for a myriad of reasons. One of those is that the buyer gets nervous about a lack of information about their purchase. Here a focus on customer engagement can help to increase buyer confidence. Many property developers do provide regular updates and handhold prospects through the buying process, but much more can be done. For example, helping prospects to connect with their neighbours rather than waiting until handover, or by providing local news updates for the area. Digital engagement solutions can automate regular communication and help to personalise the process so that prospects feel like they have personal attention. 

Visionary property developers may go further and start to redesign their sales process so that they are seen to be “coaching homeowners”, getting them ready for ownership of the new property. This is a stark difference from “managing a sales process”. In the proptech world, www.firsthomecoach.co.uk does exactly that for first-time buyers. A similar approach could be designed for all new property buyers. The “coach” could facilitate advice and content specifically for buyer types like first time buyers, upsizers and retirees.

Going Digital

Uber has designed its service so there is no paper and no physical cash, it is a purely digital service. Whilst this means you have to have a phone and a data connection, in the UK today, there is almost ubiquitous smartphone ownership and availability of mobile data. However, designing a service to be digital is very different to digitising a process.

In property handovers, the vast majority of property developers still hand over paper documentation, manuals and certificates. Significant time is spent preparing these manually. Some developers have digitised their handover documentation which is certainly an improvement. However, these are essentially online stores of information destined never to be read or maintained like their paper equivalents. A simple feature to be able to search a document or image would massively improve the usefulness of digital handovers, as would the ability to share documents, like with an insurance company or trade. 

Further, adding digital engagement features could greatly improve the usefulness of the data held. For example, providing reminders for maintenance tasks, helping to manage utility accounts or important contact information. As mentioned previously, if the handover actually became a digital coach, homebuyers would feel more comfortable about their purchase and see this as a valuable service. Getting engagement right not only increases customer satisfaction and builds loyalty/advocacy but can also help to reduce support calls/costs.

Beyond the handover

Uber’s business model to be a logistics company by delivering fast food and parcels has shown that digitisation not only creates efficiency but can generate new revenue streams. Uber even sees a future where more people simply have a subscription for rides rather than owning a car.

Today property developers lose touch with buyers after the warranty period. There are some high-end developers that diarise follow-ups to maintain a long term relationship with their customers; they do this not only to maintain a relationship but to differentiate their product with a high-end service. Using a manual approach would not be scalable for volume developers, however, it would be feasible to use a digital approach.

Without wishing to labour a single point, again the answer lies with digital engagement. Here it would be the “system” maintaining engagement by leveraging property data. By doing so, new revenue opportunities could be exploited like energy switching, future home improvements or furnishing sales. 

Within the rental segment, there are already platforms that are simplifying rental to a single bill/subscription. Could this concept be created for homebuyers?

Conclusion

Digitisation has so far created efficiency gains in property development however, a broader opportunity exists through rethinking property development as a digital business. Core to this could be mastery of digital engagement, something not just companies like Uber have mastered, but sectors like banking are also mastering now.

Dharmesh Mistry
Founder at

Dharmesh Mistry is the founder and CEO of AskHomey, a platform that helps new property developers deliver groundbreaking and exceptional customer experience for their buyers. He is also an investor and mentor in Proptech and FinTech. For over 30 years, Dharmesh has supported financial services organisations with technology and management expertise and has a proven track record of delivering transformational innovation and vision. He regularly comments on the industry and is known globally for his thought leadership.

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