The Role of the Conveyancer is Dead

The Covid pandemic highlighted our urgent need for improved technology to support various transactions, including residential property dealings. The lack of relevant and effective technology exposed significant gaps in our systems. Since 2020, the deployment of new technologies has surged, driven by the world’s response to digital transformation. However, delays in residential property transactions have skyrocketed, transforming what should be an exciting life event into a source of frustration. Action is essential to address these issues and restore the joy of buying a home.

Remember the Ludites

Technology plays a crucial role in facilitating residential transactions. Enhanced digitisation of information streamlines the flow of property data, supporting sales and purchases. Digital identity verification methods expedite customer onboarding and provide more secure identity checks compared to visual inspections of passports, which are repetitive and tedious. Additionally, our dependence on mobile phones spans the entire property transaction process—from searching for properties to completion. This integration of technology not only simplifies transactions but also enhances security and efficiency.

Technology is changing our lives, we must adapt, embrace and help shape it together.

Proptech

Over the years numerous technology companies have sought to disrupt and improve the property sector, giving rise to Proptech. Without naming names, it’s clear that the past decade has seen a surge in these companies. Significant amounts of money have been poured into Proptech, driving industry innovation and transformation.

According to Statista, Proptech investment reached a peak in 2021 as ‘companies raised $19.8 billion in 2022, down 38% from 2021’, but we have started to see a decline.

Revolutionising the Industry

Almost weekly, we see new Proptech companies claiming they will revolutionise the industry. To be honest, this is becoming tiresome as we witness the frequent failures, salvaged ventures or silent disappearances of many of these businesses.

Cazoo v Cinch

You may be aware of the demise of Cazoo, which raised $1.19B. Cazoo’s main competitor is Cinch who raised £1B, part of the Constellation Automotive Group.  These are big numbers.

Why did Cazoo fail while Cinch has succeeded, so far? Simply put, Cazoo relied solely on an online model, limiting customer interaction to digital platforms. In contrast, Cinch, as part of an established group, leveraged multiple channels to sell cars. This included online services and in-person transactions through partnerships with dealers and used car supermarkets. After Cazoo launched in 2018, established players responded to this disruptor. Cinch, 2019, capitalised on its market position with a better market understanding.

Buying a car is a tactile experience. Research data says that some people are comfortable purchasing a car online, but most still prefer the physical experience. Car dealers emphasise that it’s a people-driven business, suggesting that we need to question the reliance on data alone.

Data v Information

In residential property transactions, converting property information into data can expedite decision-making processes. This approach has many merits, and the government has a crucial role to play in facilitating this. However, there are dangers in relying solely on data. Data is often used to support predefined narratives, which can skew outcomes. Buying a property involves more than just data; it requires people to read and interpret information. Technology cannot replace this critical human element.

People often use data to demonstrate positive outcomes, with speed being a common one. They rely on numbers because those numbers tell the story they want to convey, selectively defining success. This is known as the McNamara fallacy, named after Robert McNamara, the US Secretary of Defence during the Vietnam War. McNamara measured success by comparing the body count of US and Vietnamese troops. Since more Vietnamese soldiers were killed than US troops, he argued that the US was winning.

He took easily measurable data to build a false narrative.

This serves as a caution for Proptech companies that use selective statistics, such as claiming “92% of our customers found our platform easy to use,” to illustrate their success. This practice is similar to other industries who selectively highlight their best results.

People, Who Needs Them?

I run a technology company and am a strong advocate for the use of technology. However, we must always remain cognizant of the fact that people in the process are equally important.

Do a quick online search ‘e-gates failure Waterloo and Heathrow’.  You can see the catastrophic outcomes of the failure of total reliance on electronic systems, where there were no people to intervene and resolve. In both instances, May 2024, all travel ground to a halt.

Property is a people driven business.  We need professionals to interpret and help us with information, including agents, surveyors, conveyancers and brokers.  AI cannot be solely relied upon to make decisions for us because there is then no accountability. Dan Davies defines this in his book The Unaccountability Machine, as the ‘accounting sink’ “when decisions and rules are delegated to algorithms, but nobody is accountable for the consequences”.

When something goes wrong who is then entrusted to fix it?

We need to work together to improve the property sales process, journey, experience, for the sanity of the professionals and customers.

God forbid that we end up with a system where we rely solely on an ‘app’ with no accountability, infrastructure or people. When it fails!