Do We Need to Reinvent the Wheel?

I am a massive fan of PropTech. I am an advisor to a PropTech firm, like to mentor new startups in the sector and am developing our own technology to support new ways of working.

It’s all very well that we find new ways to innovate property management, provide smart homes, address the Build To Rent platforms etc but 20% of the property market is leasehold. That’s around 4.5m homes (with 40% of that used for PRS) and a small number of BTR schemes, yet there are fundamental flaws in the system where existing technology could assist but is restricted by archaic legislation prohibiting its use. 

For example, the estate and block management industry is penalised for accept credit card payments because we can’t charge the lessees the processing costs (and as law states we must pass 100% of what was demanded to the service charge the agent ends up paying the card fees), we can’t spread the cost of annual service charges easily to help lessees because setting up Direct Debit is near on impossible and even if it were, it’s technically in breach of the lease and to top it off, we have to serve everything we do by post useless explicitly permitted by a lessee to send by email. This is a very short list of hugely cumbersome working practices which we have to abide by and is simply not fit for modern day purpose. 

What is the knock on effect of all this?

Additional cost to the end user, less efficient communication and cashflow issues which can taint an industry that should be leading the way in home ownership. It creates overly onerous administration processes which in turn makes management very people-centric and no amount of innovation or automation can possibly solve it given it is prohibited. 

Perhaps government should be looking for ways to help make home ownership affordable, pleasant and effective by simply changing outdated rules that do not fit the modern world. This would free up innovation that already exists to come in and bring down costs to providers (so in turn the customer), ease cashflow, reduce rouge agents (who hide behind these hurdles to their benefit), landlords who impose high fees to make up the lost profit and allow it to compete against other asset classes that do not have such cumbersome rules.