28/06/2024

How AI is revolutionising PropTech

The total value of the UK residential housing market is now worth £8.67 trillion, according to Savills, with the value of the UK commercial real estate market estimated at around £1.1 trillion. There has also been significant growth in the rental property market in recent years, driven by post-pandemic lifestyle changes and affordability issues.

With estate agents continuing to buck the trends and remaining busier than ever, custom software has never been more important for this fast-paced, turbulent industry, with generative AI opening up a whole new world of possibilities. In our recent survey, 67% of mid-senior executives expressed a belief that AI will transform everyone’s lives for the better.  

Powering Real Estate with custom software solutions

Custom software has been a game changer in the  property sector. The ability to analyse and efficiently report data accurately and share data in real time is crucial for success. Traditional methods of data analysis and reporting are often time-consuming, prone to errors, and lack the agility needed to keep up with the fast-paced industry.   

As such, custom software is now commonly used across all aspects of the real estate industry, from real-time property auctions, with up to 5,000 active users on sale days, to intuitive rental management portals, to compliant conveyancing software that integrates seamlessly with external suppliers, like legal teams, insurers and surveyors. 

The integration of generative AI as part of bespoke property software solutions, though not yet prominent, is a growing trend. Some big names in the sector are using AI and machine learning for basic purposes like predictive analytics, data insights, and automation. For example, appraisals and estimates have traditionally been based on neighbourhood comparisons and human opinion, but AI-based algorithms are increasingly being used to generate these estimates. Generative AI even supports walk-through, 3D interactive tours of properties so that potential buyers can get a real sense of how a property looks. Future developments are set to see more widespread use of generative AI being integrated with custom software solutions in areas such as personalised client interactions, conveyancing, automated marketing and content creation, and even more advanced data insight generation. 

How can AI add value to real estate insiders and house buyers alike?

As we have already seen, AI-powered software has the potential to make things happen faster, provide deeper insights,  improve the sales or letting process and enhance the customer experience. 

For property businesses, all predictions indicate that there are significant efficiencies and a number of key opportunities AI could bring, in areas such as: 

Lead generation and management 

AI can analyse large volumes of data to identify and prioritise promising leads, ensuring agents focus efforts on high-potential clients. What’s more, it can bring predictive analysis of leads that are most likely to convert, helping agents tailor their strategies and improve conversion rates. 

Property valuation 

Automated Valuation Models (AVMs) are AI algorithms that can quickly and accurately estimate property values by analysing comparable sales, market trends, and property characteristics. AI can also provide real-time market insights, helping agents and investors make informed decisions. 

Customer relationship management (CRM) 

AI-powered CRMs can automate and personalise communication with clients, sending tailored messages based on their preferences and behaviors. AI chatbots and virtual assistants can handle initial inquiries, schedule appointments, and provide instant responses to common questions. Although this must be handled with care, as  relationships and human contact are the beating heart of the real estate industry. 

Property management 

When it comes to maintenance, AI can predict when issues are likely to occur, allowing property managers to address them proactively. It can also be used for tenant screening, analysing rental applications, credit scores, and background checks.  

Marketing and advertising 

AI can analyse data to create highly targeted advertising campaigns, reaching the right audience with properties that are just right for them. Generative AI can also be used as a tool to create marketing content such as property descriptions, blog posts, and social media updates, saving time for agents. This must always be carried out under the careful eye of an experienced agent to avoid irrelevant content and repetitive language. 

Transaction management 

AI can automate the generation and management of contracts, forms, and other documents, reducing paperwork and the risk of errors, as well as streamlining the signing process and ensuring compliance with legal and regulatory requirements. 

Generative AI can provide huge advantages to homebuyers too...

Property searches 

The technology can provide personalised property recommendations based on a buyer’s preferences, search history, and behavior. AI-powered virtual tours and 3D visualisations also allow them to explore properties remotely, providing a more immersive experience. 

Decision-making 

AI can help buyers make informed decisions about where and when to buy with real-time market data and trends. It may even predict future property values, giving buyers insights into potential returns. 

Financial  

Suitable mortgage options can be recommended using AI by analysing a buyer’s financial situation, helping them understand their affordability and manage their finances better. 

Will AI replace people in the property sector?

Whilst AI has the potential to significantly transform the real estate sector - augmenting and enhancing human capabilities, allowing professionals to work more efficiently and effectively by handling many technical and repetitive tasks - it is unlikely to completely replace humans.  

That’s because AI cannot deliver complex decision-making and emotional intelligence 

Real estate transactions often involve making decisions in unique situations that require human judgment, experience, and intuition. For example, factors like neighborhood culture, potential for future development, and personal preferences are difficult for AI to fully comprehend. 

Real estate is a relationship-driven business. Building trust and rapport with clients is essential and successful negotiations often depend on the interpersonal skills and persuasive abilities of humans, which are difficult for AI to mimic. Buying or selling a home is an emotional process for many people, with agents often providing empathy, understanding, and reassurance, which, as it stands, cannot be replicated by AI.  

Local market and industry knowledge 

Professional estate agents have in-depth knowledge of local markets and communities. They understand the nuances of different neighborhoods, schools, amenities, and local regulations. As such, agents can provide context about market trends and property histories that AI might miss. 

Property trends, custom software and AI (oh my)

Working and domestic lifestyle shifts and trends are always quick to impact the real estate industry, which must flex and scale to changing demands and needs of people - at home and work.  

Sustainable and green buildings 

There is an increasing demand for eco-friendly and energy-efficient buildings. Buyers and tenants are looking for properties with lower carbon footprints and sustainable features. Custom software can provide tools for tracking and managing energy consumption, automating sustainability reporting, and offering insights into green building certifications and standards. For instance, software can model energy savings for different sustainable upgrades. 

PropTech integration 

The adoption of digital tools and platforms for digital property transactions, management, and marketing has grown, with over £1.6 billion invested in PropTech in 2021 alone. Custom software solutions can integrate various PropTech tools into a single platform, providing seamless user experiences. Virtual tour capabilities, smart home integration, and AI-driven property management can all be part of a bespoke PropTech ecosystem. 

Remote work and flexible spaces 

The rise of remote work is driving demand for flexible living and working spaces. There is a growing interest in properties that offer home offices and adaptable spaces. Bespoke software can offer virtual space planning tools, allowing potential buyers to visualise and customise spaces to suit remote work needs. Additionally, property management platforms can offer flexible leasing options and booking systems for shared spaces. 

Data-driven decision making 

The use of big data and analytics is becoming increasingly important in real estate. Data-driven insights help investors, agents, and buyers make informed decisions. Custom software can provide advanced analytics and reporting tools, integrating various data sources to offer comprehensive market analysis, property valuations, and investment forecasts. Predictive analytics can also help identify emerging market trends and opportunities. 

Blockchain and smart contracts 

Blockchain technology is set to transform property transactions by providing secure, transparent, and efficient processes. Smart contracts can automate various aspects of property sales and rentals. Bespoke software can leverage blockchain to create secure and transparent transaction platforms. Smart contract integration can automate the execution of lease agreements, property transfers, and payments, reducing the need for intermediaries. 

Enhanced customer experience 

Providing a superior customer experience is becoming a key differentiator, with personalised services and responsive communication becoming more crucial for attracting and retaining clients. Custom CRM systems can offer personalised communication, track customer preferences, and automate follow-ups.  

Co-living and shared spaces 

Co-living spaces are gaining popularity, especially among young professionals and students. These spaces offer affordable and community-focused living arrangements. Bespoke software can manage co-living spaces by offering booking systems, community management tools, and maintenance tracking. Platforms can also facilitate social interaction among residents through community features and event planning tools. 

Augmented reality (AR) and virtual reality (VR) 

AR and VR are enhancing the property viewing experience, allowing potential buyers to explore properties remotely. Custom AR and VR applications can create immersive property tours, enabling buyers to explore properties in detail from anywhere. Visualisation tools can also allow users to see potential renovations or customisations in a virtual environment. 

Andy Brown, Director at Propel Tech concludes:

“The UK real estate industry is undergoing significant changes, driven by evolving technology, consumer preferences, and market dynamics, and custom software and emerging developments in AI are key to the growth and success of the sector. As one of the fastest moving industries in the world, PropTech is one of the most exciting areas of IT to be working in.”

Propel Tech is highly experienced in the domestic and commercial real estate sectors, working with household names such as LSL, Your Move and Allsop, to develop and modernise industry-leading software that makes possibilities happen. Read more about our work in the real estate and other sectors on our ‘projects’ page. 

Author: Claire Anderson
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28/06/2024

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