AI – can it really help the UK real estate sector?
Thanks to the ValPal Network for this Article!
Conversation on PropTech wouldn't be a proper conversation if there was no mention of Artificial Intelligence (AI) and the potential effect it could have on our industry. AI has yet to make much of a splash in the UK property sector, but that's not to say its profile and potential are not growing each year.
And the government recently showed it's taking AI seriously by announcing a £75 million fund to support tech start-ups and AI students and help to create an AI advisory board. All this funding and support is designed to break down the barriers to AI progression as the UK currently lags behind when compared to many other countries.
Will any of this funding and development trickle down to the more traditional property sector? It's hard to say at this point, but we know the potential is there.
Watching films like Ex Machina and TV series such as Black Mirror show us the dramatic effect AI and tech could have on our lives in the future. And as our everyday lives are consistently being improved by little bits of AI which we don't even notice, it's time for the property world to push its way into the AI space.
But what are the potential positives and pitfalls and which property people are already using AI to their benefit in 2018?
AI – a strong opportunity to innovate
Used correctly, AI could help property firms to operate on a grander scale. Processes like streamlining and scaling have taken on more significance for smaller property firms in the wake of the Brexit vote, ongoing political uncertainty on both sides of the pond and, specifically for letting agents, the upfront fees ban which is due to come into force next year.
One aspect of the property transaction in which AI could really help the professionals is through automated learning and predictions. AI could, for example, help estate agents to identify which prospects are most likely to sell their home. Identifying the right people at the right time increases conversion rates and saves humans time.
What's more, when it comes to conveyancing and the latter stages of property transactions, there are many complaints that the process falls down due to poor communication and antiquated working practices. Surely there are ways in which AI could speed up completion times and reduce fall through rates?
There are of course parts of the property sector where AI is especially suited and being used already. Management companies, for example, can use AI to log repairs and communicate with millennials tenants' through automated channels.
Weaknesses in the AI armoury
The biggest consideration – and primary concern – when it comes to AI proliferation in the property sector is employment. Some property firms may be less willing to embrace PropTech solutions that incorporate AI due to the impact this could have on staff morale and this is a challenge the AI industry needs to address if it is going to make any headway.
And once it has the trust of the professionals, it needs to build the trust of consumers. Property related transactions are usually more expensive than average purchases or services and so there will be many consumers out there that won't be happy about allowing a 'robot' to handle their transaction. What's more, in the UK at the moment, it remains that the older generations are the ones with the capital to make large property purchases/transactions – will they be convinced by AI's potential or would they rather do things the traditional way?
AI's key aim, therefore, should be how it places itself. It needs to be seen as a complementary tool which speeds things up and makes processes more efficient. If property professionals, and indeed consumers, see it as replacement technology it may continue to struggle to get off the ground.
On top of this, one of its biggest perceived weaknesses is the challenge of data sharing and big data. For AI to be working at its optimum, it needs to gain access to as much information as possible. But as people become more savvy and concerned about where their data is being held and shared – coupled with the introduction of General Data Protection Regulation in May – this could be a huge challenge to the fledgling industry.
Who is using AI and to what effect?
One AI solution that has received a lot of attention in 2018 so far is AskPorter, which claims to be the world's first AI-powered property management platform.
It secured significant investment and aims to offer AI communications – via a PA service to property managers and a concierge service to consumers. It could be very successful in the UK, especially if the move toward American-style fully-managed rental blocks starts to take off here.
There are of course many PropTech solutions which already provide elements of AI in their offerings in order to help property consumers. For example, digital mortgage advisers or so-called 'robo advisers'.
And here at The ValPal Network, we too have AI technology which is helping us to help agents. In generating instant online valuations, our valuation tool uses AI to inform its algorithm – essentially using existing information (house prices and sold records) to provide an up-to-the-minute automated response for consumers.
We're also working on an automated chatbot which will help agents to identify vendors and landlords as they hit their website and capture their details as an additional form of contact.