Did you know, the average age for first-time buyers in London has reached 36? We’re not trying to put a downer on your week, promise! What we are trying to show you, is why PropTech start-ups are so successful within the world of funding and how they’re developing ways to make the first step onto the property ladder that little bit less stressful.
What is PropTech?
Put simply, PropTech is the name given to technological innovations that are developed for and implemented within the property industry. Start-ups in this sector can be split into three broad subsectors: property investment platforms, web-based estate agents/property-listing sites, and web-based platforms designed to disrupt how people buy or own homes.
Property lending platform LendInvest has become the UK’s leading PropTech start-up. Their platform acts as a two-way street for property borrowers and lenders. Investors put their money into LendInvest, who then package the finance out into loans for property developers or buyers. The investor takes the interest, minus a small fee which is taken by LendInvest. One of the key attractions for this platform is that investors can manage their investments according to their specific requirements. LendInvest were recently valued at over £150 million, with their 2018 turnover exceeding £30 million.
British Pearl is looking to challenge LendInvest’s current leading position in within P2P property lending. Through their platform, investors can either purchase shares in properties, or put money into property loans. From property loans, they can receive a secured rate of interest. In July this year, British Pearl raised £7 million in equity from Lord Stanley Fink.
Who hasn’t heard of Zoopla? It’s a popular destination for first-time buyers and seasoned buyers alike who are looking to see what’s out there. What sets them apart from their closest rival Rightmove, is there access to demographic data which can really enhance the search process before stepping inside an estates agent’s office. Zoopla achieved a billion dollar valuation in June 2014 and were taken private earlier this year by American firm, Silver Lake, for £2.2 billion.
Another U.K founded company which is a staple for homebuyers starting their home buying journey. Set up in 2000, they hold a comprehensive list of properties and facilitate interaction with estate agents and self-selling platforms such as Yopa. Unlike Zoopla, Rightmove publish a monthly House Price Index, which often serves as a strong guide for assessing if a buyer is getting a fair price.
Unmortgage is of particular interest to first-time buyers who are struggling to get onto the property ladder. It allows prospective homeowners to purchase a property with just 5% of the deposit. Unmortgage’s investor partners purchase the rest of the property. Homeowners then pay a mixture of rent and mortgage payments. The rent matches the value of the property that Unmortgage still owns. For instance, if Unmortgage owns 90% of the property, the occupier pays 90% of the market rent.
Atom Bank is one of the fastest start-up banks in Europe. Atom’s mortgages (your broker may refer to them as digital mortgages) have been offering competitive rates and their approach has taken some of the headache of paperwork away.
Some other names to watch out for hoping to completely digitise the overly mortgage process with sleek, high-UX web-based software. These include MortgageGym and Molo Finance. These are definitely ones to look out for if you’re looking for a different way to know what you can afford before starting the home buying process.
Do you think you might have the next big idea in PropTech? Don’t let these guys stand in your way – there’s always something new to try! Head over to swoopfunding.com and find out how we can help you on your business journey.