“The Convenience Enabled by Technology Will Catapult us Forward.”
This is a guest article written by Adam Blaxter and first appeared in our collaborative e-book “The Future of Property,” which features 17 thought leadership articles covering PropTech, property investment and housing. You can download your free copy here.
Adam Blaxter is Director of Strategy and Business Development at Technology Blueprint Ltd (TBL), a leading PropTech consultancy, and co-founder of the Rentr app for landlords and tenants.
“The convenience enabled by technology will catapult us forward to a model of unprecedented mobility and transactional ease.”
Imagine the near future, where PropTech strands pull the most traditional of assets - real estate, into the orbit of contemporary market models. Look ahead to when ‘renting’ as we know it is a fading arrangement. When more and more people are owning just enough property to live in, yet building up a property portfolio earlier. Not by buying whole units - flats, houses, blocks - but by acquiring shares in property holding companies that grow their stock room by room, floor by floor, and location by location.
Once blockchain land registry enables the rapid transfer of property - moving the pace of exchange from months or weeks to minutes or even seconds - property markets will float as exchanges. This will escalate volatility and risk and enable large-scale capital investment to flood into the PRS.
“The tech-enabled future combines capital and markets with smart systems that mean what you ‘own’ is both a material asset class - property shares - and the right to occupancy under agreed terms.”
Ownership today is based around a blend of capital, debt, and rental. The tech-enabled future combines capital and markets with smart systems that mean what you ‘own’ is both a material asset class - property shares - and the right to occupancy under agreed terms. Financially, you are an investor, an owner, and an occupier. What makes this model work is the speed and confidence with which property can be exchanged and the security of your rights.
Receiving rights of occupation from an institution will become the norm, with ultimate ownership transferring at increasingly rapid speeds. AI authorities will begin to act for the corporate legal entities, monitoring, assessing and approving ownership and occupancy requests. From a distinction between ‘renting’ and ‘owning’, ownership of property moves to ownership of shares in sufficient quantity, or of sufficient value, to entitle you to occupy a particular asset for a particular duration, or on particular terms. Rights of occupation must be maintained, and this too is accomplished via the blockchain digital contract.
“Readily exchanged, tracked and transacted shares in property holding companies fragment property as an asset.”
Readily exchanged, tracked and transacted shares in property holding companies fragment property as an asset. At the same time the rapid, transparent, and authorised association of the asset value with an individual allows people to move fluidly between accommodation.
From a user experience point of view, you simply arrive at your new home and move in. The rest happens in the background via digital assistants and intelligent agents that communicate with a network of software applications and smart contracts, and transact ownership over property exchanges.
This includes:
- The planning of availability;
- The matching of your choice of location;
- The measurement and validation of ‘affordability’ against your current shareholdings;
- The evaluation and authorisation of any additional financial obligations on your part and the subsequent acquisition of supplementary shares to fulfil them;
- The exchange of rights and title; and
- Of course, the authentication of your right to occupy the space as you approach the smart security door.
Need to relocate for work? Simply notify your digital assistant of your requirements and they will check your current holdings and apply to administrative organisations like WeWork for suitable accommodation in your ‘price range’. At any given point in time your ID can be checked against the blockchain and your ownership validated quickly and easily. Virtual tours of available options will be standard – you might even task your assistant with signing off on one for you – and the deal will go through effortlessly. You just need to turn up, and the building itself will let you in.
Want to upscale? Instead of renting or paying off a mortgage or saving and investing in other asset classes, most people will routinely invest via salary exchanges. This will be both to acquire more stock and grow their existing assets, and to maintain their existing holdings. Algorithmic processes assess and evaluate risk constantly via your digital profile. eMortgage brokerage will add layers of invisible terms to your personal smart contracts, and your monthly payments will simply adjust to meet your needs.
“In some ways, the future’s already here.”
Sound like science fiction? Well, it is already 2017… Let’s knock on the walls of this futuristic scene and see whether it’s viable…In some ways, the future’s already here. There are already thousands of tangible examples of the emerging tech-enabled ways of working, occupying and owning.
WeWork exists as a membership scheme for office space, allowing you to use what you need when you need it. Property Moose and other innovators already allow small-scale investors to take shares in property units.
Blockchain technologies are coming to a land registry near you: Sweden is already working on a project around the buying and selling of a house, with secure signatures at every stage in the process, reducing time from months to hours and enabling a large reduction in fraud.
The IPSX, the first regulated exchange dedicated to the admission and trading of securities in commercial real estate assets, has passed regulatory approval and aims to be up and running this year.
Jaguar Land Rover’s ‘FutureTech’ vision for transport places ‘transportation as a service’ at the centre of their AI-enabled ‘steering wheel of the future’, This model is characterised by sharing of vehicles but with personalised service ownership via their ‘Sayer’ assistant.
Electronic Mortgages, keyless entry, and automatic personalised experiences are becoming increasingly viable as our digital profiles become richer and more detailed, and personal digital assistants such as Siri and Alexa are embedding themselves in the fabric of our lives.
“We are just a couple of steps away from a WeWork style residential property scheme.”
And there’s much more to come. Where property is ultimately a ‘bricks and mortar’ business, ownership is something else. Unlike other areas, where PropTech has taken the lead via residential property businesses and use-cases, blockchain, share issues in property units and the role of property exchanges may well come in first via CRE.
We are just a couple of steps away from a WeWork style residential property scheme, something which itself can be transformed as we move away from a distinction between owning and renting to something both very new and, somehow, very familiar.
“Realising the massive value in both existing and new property assets by allowing shares in them to be bought and traded at high-speed seems inevitable.”
How long will it be before we wonder why it ever took so long to decide who could live where, in the same way that we now wonder why we ever tolerated how long it took to make a mail order purchase? As the available technologies become more powerful and more connected, releasing and realising the massive value in both existing and new property assets by allowing shares in them to be bought and traded at high-speed seems inevitable. If we get it right, the convenience enabled by technology will catapult us forward to a model of unprecedented mobility and transactional ease - and backward towards the age-old freedom to make your camp wherever you choose, whenever you choose.
- Written by Adam Blaxter
Capital at risk