With less than a week to go until the Chancellor of the Exchequer delivers his first Autumn Budget, which is due to make the property industry a prominent feature, Agent Wow was keen to get some invaluable insight into what’s in store for the sector in the Budget and how proptech can and should be utilised to help overcome challenges the property industry faces.
Leon Ifayemi, CEO and co-founder of SPCE, shed some light on why the Chancellor needs to embrace proptech solutions in his forthcoming budget.
Since the EU referendum the property market has proven resilient, with house prices continuing to rise across the country and the rental market expanding. Yet, while the overall response has been reassuring, there’s no denying the need for targeted reforms to ensure the property industry as a whole adapts and evolves in what is undeniably a challenging environment.
The 2017 Autumn Budget arrives at a critical time; as Brexit negotiations wane, the Chancellor has the opportunity to deliver a series of measures to ensure businesses and consumers alike are in a position to confidently plan for the future.
Over the past week, leaders in the property space have been calling for the Government to reform stamp duty so that it doesn’t act as a deterrent for those seeking to start or expand their property portfolio. There have also been hints of new tax perks for landlords offering longer-term tenancies, and further insight into proposed measures to ban Letting Agent fees – it is estimated that £13 million is paid by tenants to Letting Agents each month.
However, putting these touted policy reforms to one side, what would be most reassuring would be to see the Chancellor place a real emphasis on innovation and progressive solutions in the property market.
As an industry worth over £6 trillion, there is an impetus on the Government to embrace creative thinking and look beyond traditional solutions when it comes to how properties are bought, sold, developed and rented. An ideal place to start is the private sector, and in particular, the buzzing hubs of start-ups in the property industry testing and introducing digital solutions to the real estate market that streamline services, improve transparency, and enhance communication.
You don’t need to look far to see what’s on offer – from conveyancing apps that reduce the reduce the risk of gazumping to online forums that link tenants and landlords together, the property market is on the brink of a full-scale transformation, something that cannot be overlooked by the Government. The UK has developed a global reputation for its proptech industry, with entrepreneurs seeking to improve the performance of the market while prioritising the interests of all parties involved.
Supporting the rise of proptech
The number of proptech start-ups operating across the nation is rising, with 45% backed by private equity, venture capital or crowdfunding in the 12 months leading to April 2017. This is a resounding statistic, demonstrating not only the vital role of alternative finance in fuelling the next generation of UK scale-ups, but also that there is a community of investors more than willing to back the country’s innovative businesses. But with SMEs often struggling to scale-beyond the start-up phase, the Budget offers an opportunity to address some of the issues that undermine the long-term growth progression of small businesses.
With thousands of companies fearful of a skills gap emerging as a result of Brexit, measures that encourage private investment into businesses – such as tax-efficient investment schemes like EIS and SEIS – would be welcomed.
For the UK to secure its position as a leading hub or innovation within the proptech space, it’s equally important for the Government to improve awareness of digital solutions on the market, all the while nurturing a private sector environment that will enable start-ups to thrive, including boosting digital infrastructure as well as improving effective access to finance and mentors.
The 2017 Autumn Budget is an ideal opportunity for the Government to address the challenges facing the UK property market, while also introducing reforms that encourage and nurture the long-term capabilities of the nation’s proptech industry. These shouldn’t be treated as separate issues; proptech can effectively alleviate the key concerns facing investors, homebuyers, landlords and tenants, and this should be seen as part of the solution.