Aided by incomparable talent and a steady flow of venture capital, the UK proptech sector receives 10% of global proptech investment, and the lion’s share of European investment. We are now very much at a turning point, and the next few years will likely define the future of British proptech.
At our Pi Labs office in Soho, we recently hosted Esther McVey, minister of state for housing and planning, along with eight other members of the MHCLG and some of the top 700 UK proptech firms for a summit to discuss how to capitalise on this momentum and work together to help the ministry achieve its policy objectives.
Suffice to say, the government is grabbing the opportunity to galvanise this sector, partly because it knows it will grow significantly over the next decade and can help solve key social issues such as home ownership, sustainability in construction and buildings, smart cities and community engagement – all of which we are very passionate about at Pi Labs.
One of the most exciting revelations made by Esther was the openness of her department to make available government data for proptech start-ups to use and analyse when creating new services for consumers and citizens.
Esther and the rest of the MHCLG are taking an innovative approach to solving the housing crisis, but we must not myopically focus on building new homes.
The built environment as a whole, including all sectors of real estate, can benefit from proptech solutions; companies such as 720 Degrees, for example, focus on optimising the working environment in office buildings. Their solution is simple but powerful, interpreting a myriad of indoor air data points to make sure property owners and managers have real time data on their air quality, something that has been associated with employee health and wellness.
Delivering on social good
What excites us is that proptech can be a force for good – data in the hands of citizens means greater transparency and, in some cases, greater power to influence the future direction of their local communities.
Pi Labs’ portfolio company Built-ID also attended the summit and discussed how to engage local communities by digitising planning processes. Built-ID only launched its solution this April, yet is on the path to transforming the community consultation process. Whereas before it was simply a box-ticking exercise, now, via Built-ID’s intuitive online platform, diverse voices are finally being heard at scale.
At the risk of being hyperbolic, the possibilities are endless. Just look at what open banking regulation has allowed fintechs and large institutional banks to do for their customers in terms of improved user experience and new financial products. If the government releases more data for start-ups, then they can start doing some really creative things – we have the talent, we have the proptech community, and we may soon have the fuel as well.
To put it simply, making sure the proptech ecosystem remains in rude health is absolutely fundamental for the government to meet its ambitious policy objectives. In many ways the private proptech start-up scene has a symbiotic relationship with the government – and early signs show that there is a real opportunity for government to champion this sector the way it did the overall tech sector in the mid noughties with advocacy around Silicon Roundabout, and recently the way it stood behind investment in British AI.
Let’s be clear, however, that this is very much the beginning. For the UK to emerge as a global leader in proptech, it is absolutely critical that the government and the proptech community work closely together to create an environment that provides this sector with the fuel it needs to grow.
The raw ingredients of this fuel are data, more VC funding across multiple stages, and close public-private collaboration. The summit last week at Pi Labs was a great start – as with all these things, the real challenge will be in the follow through.
Faisal Butt is chief executive of Pi Labs.
