LSL look to acquire TenetLime to scale Financial Services
In February 2020, LSL were looking to acquire the assets of Countrywide PLC, which was in its death spiral, so at that time LSL were looking to be an agency superpower. A we know the deal never happened and the Connells Group swooped in and did the necessary.
Fast forward 40-months and earlier this year LSL divested itself of the 183 ‘owned’ estate agency branches that it held, a clever move reducing a £110M liability. It also tidied up the business by selling off First2Protect and Embrace F/S seeing an 18M return.
So LSL had completely changed its strategy, though being connected to estate agency it was looking to the fiscal vertical as the driver for future profits. Which though a brave move proved costly with property purchasing finance being down by over 25%. A reflection on the industry as a whole rather than a metric specific to LSL.
Now it has been announced subject to ratification by the (FCA) Financial Conduct Authority that LSL is buying the regulated mortgage and protection advisory network of TenetLime. If the deal goes through LSL’s ranks will be swelled by over 230 advisers with a possible tranche of nearly 50 to be passed across in the near future.
The financials of the deal are said to be around North of £10M, with over £5M to be paid upfront. What is interesting to many pundits is will this be seen as a great coup, or in the coming years not the best strategy. The reasoning being that LSL’s DNA is agency, yes financial services is a magnificent cash cow if organizations get it right. Think Connells Group, or even Countrywide in its more halcyon days.
But, when large companies try to go against type, like for example the Chair of John Lewis, Dame Sharon White, who presided over a £234M loss, last year and who was until June of this year a NED at Barratts. Sharon now seems hell bent on ‘developing’ on any site that can be developed, rather than running a retail business that sells consumer goods – well things can go wrong pretty quickly.
For sure the concentration of advisers will give LSL a powerful base to work from, and as their Group CEO David Stewart put it, ‘we have been able to complete this transaction and I look forward to welcoming TenetLime’s advisers to our PRIMIS Network. The increase in membership will help us to further invest in our service offering to member firms as well as delivering scale economics to support further growth’.
But to my mind, we are getting close to a watershed moment in financial services where having lots of human advisers churning the mortgage business will be, superseded by fintech software. As I now see the move away from the human to human approach. So maybe having an army of advisers will not be such an industry advantage after all.
Will artificial intelligence help real estate in the UK
Analysis by Zara Stanton.
In a nutshell yes, artificial intelligence (AI) has the potential to significantly benefit the real estate sector in the UK and globally. Here are some ways AI can and, in some cases, already is helping the real estate industry broken down into different segments:
- Property Valuation: AI can predict the value of a property by analysing vast amounts of data, including past sales, location, amenities, local market trends, and other variables. This aids in pricing properties more accurately.
- Virtual Tours and Augmented Reality: AI-powered virtual and augmented reality tools can provide immersive property tours, allowing potential buyers or tenants to explore properties from anywhere in the world.
- Chatbots and Customer Service: AI-driven chatbots can answer queries round-the-clock, providing instant support to potential buyers, tenants, or landlords.
- Predictive Analytics: By analysing market trends, AI can predict which neighbourhoods or types of properties are likely to become popular, which can be invaluable for investors and developers.
- Risk Assessment: AI can better evaluate the risk factors associated with a property, such as its vulnerability to natural disasters or changes in local market conditions.
- Facilities Management: In the realm of commercial real estate, AI can be used to optimize building operations, from energy management to space utilization.
- Lease Management and Document Automation: AI can streamline the often tedious process of managing leases, tracking renewals, and processing other real estate documentation.
- Personalized Recommendations: Much like how online retailers suggest products, AI can analyze a potential buyer or tenant’s preferences and financial capability to suggest properties that are a fit.
- Mortgage and Loan Assessment: Banks and other lending institutions can utilize AI to automate and enhance the accuracy of the mortgage approval process.
- Property Maintenance: AI-powered solutions can predict when a property component might need maintenance or replacement, allowing property managers to act proactively.
- Investment Analysis: For those looking to invest in real estate, AI tools can analyse a vast array of variables to recommend the best options based on an individual’s or institution’s investment goals.
However, the implementation of AI in the real estate sector also comes with challenges. Data privacy concerns, the potential for biased algorithms, and the need for human intuition and local market knowledge mean that while AI will play an increasing role in real estate, human expertise will remain crucial.
For the UK, specifically, with its rich history, diverse property types, and unique market characteristics, AI will be an invaluable tool to assist agents, buyers, sellers, investors and property practitioners, but it will be essential to adapt global AI solutions to the local context.
Andrew Stanton is the founder and CEO of Proptech-PR, a consultancy for Founders of Proptechs looking to grow and exit, using his influence from decades of industry experience. Separately he is a consultant to some of the biggest names in global real estate, advising on sales and acquisitions, market positioning, and operations. He is also the founder and editor of Proptech-X Proptech & Property News, where his insights, connections and detailed analysis and commentary on proptech and real estate are second to none.