Savills’ blockchain guru Steven Lang (above) is the first to admit that the technology has an image problem.
Bring up cryptocurrencies in conversation – which are applications based on blockchain – and you’re cool and cutting edge. Talk about the technology itself and you’re faced with befuddlement and worse, yawns.
Nevertheless, Steven caught the blockchain bug after first coming across it two years ago when, at a meeting with clients, someone said they’d just ‘chuck their data on the blockchain’.
“I nodded sagely and said ‘of course, of course’ without having a clue what they were talking about,” he says, “before rushing back to the office to try and find out”.
Like Steven, the property industry has been playing catch-up. Andrew Lloyd, managing director of Search Acumen and a UK Proptech Association board member likens it to the early days of mobile phones and the internet; everyone’s dimly aware of how it might change their working lives and businesses, but they’ve got better things to be getting on with.
“I think agents are not entirely sure what it will mean for them and at the moment they’ve got bigger concerns about their models around online and hybrids versus traditional ways of working at the moment,” says Andrew.
The burning question is, will blockchain-based applications one day have the same impact as Rightmove or iPhones did on estate agents’ lives?
Before answering that, it’s best to explain what blockchain really is, although it’s pointless trying to explain exactly how it works.
This article would double in length if we tried. The best non-geek way is to say it’s an incorruptible digital chain of information that replaces people or paper-based ‘trust networks’, as its initial and most famous application – Bitcoin – has tried to do with cash.
It’s catching on, however dull it may sound. The Dubai government is aiming to use blockchain applications to run its government – including parts of the property buying process – by 2020, while the Land Registry’s ‘Digital Street’ initiative is taking a prolonged sniff around it.
Also, US supermarket Walmart is implementing a blockchain application for all its fresh produce suppliers by 2019, the London Borough of Greenwich is planning to use blockchain to provide its services soon and the New South Wales government in Australia is about to start a blockchain trial for its Land Registry service.
“The blockchain is an incorruptible digital ledger of economic transactions that can be programmed to record not just financial transactions but virtually everything of value.”
Don & Alex Tapscott, authors Blockchain Revolution
For estate agents, the biggest change they’ll notice will be a transformation in the way sales progression is achieved, aided by several innovations that already fit nicely into blockchain.
These include both the spread of electronic signatures and the Land Registry’s rapid digitisation; it recently announced that it wanted to achieve the first 100% electronic house sale later this year.
“It’s still incredible that buyers and sellers still have to sign paper documents sent to them by their solicitor covered in sticky notes when digital signatures are available,” says Steven Lang.
Andrew Lloyd says the innovations that blockchain will usher in include digital property passports, smart contracts for exchange and completion plus digital mortgage applications and approvals, all within the next 18 months to five years.
“But I think we’re about a decade away from a complete end-to-end blockchain property transaction system becoming the norm”, says Andrew.
That would be quicker than the internet took to get its tentacles into the property industry, the introduction of which has taken approximately 25 years.
But there are already a few property companies trying to introduce their blockchain ideas now including UK conveyancing platform ViewMyChain which launched in 2016 and more recently Propy, a US service with global pretensions.
Based in California but with its eyes firmly fixed further afield including in Europe, the Middle East and Africa, Propy is currently valued at $24 million and has sold $15.5 million worth of sale ‘tokens’.
Such riches have helped it sell 13 homes across the world so far which, although it sounds like a lot considering the millions involved, are the company’s initial test sales in each of its markets rather than a serious roll-out.
This has included transactions in California, Dubai, Nigeria, Arizona and most recently in Seville, Spain.
Propy is feeling its way. The company’s blockchain application wants to create a global property sales platform that eventually will enable cross-border transactions without the need for governments (or their land registries) to get involved directly in the conveyancing process.
“In addition to our existing coverage we’re hoping to be in the world’s main cities including in New York and Los Angeles in the US, Singapore and Hong Kong in Asia and several in Europe as well,” says its CEO Natalia Karayaneva (main pic).
“Consumer resistance to blockchain is a big challenge for all the companies involved and our goal is to build a consumer-centric platform that is good that when people use it, they won’t notice that there is blockchain technology behind it.
“We want the agents to educate buyers and the sellers in each territory to use the platform, a bit like when Apple introduced the iPhone and everyone had to learn a new way to do things through apps, for example.”
Outside of its home market of California, Propy is using a network of ambassadors to be evangelists for its service.
To date these have been tech-savvy and well-connected estate agents who can both pull political levers locally and nationally but also introduce Propy to their clients.
Most busy agents might be excused for being cynical about such an ambitious blockchain project, but Propy is a perfect illustration of both the challenges and potential benefits that applications offer.
Both vendors and buyers will have to be persuaded to use Propy’s early-stage and daring tech, but its speed may allay their doubts; Propy claims to have completed sales between offer and completion in a matter of days. The UK average hovers around 14 weeks.
“We can achieve this partly because there are no longer emails and phone calls being unanswered or missed, and no more physical paperwork to be handled,” says Natalia.
Propy says it will make its money from vendors who will pay approximately £100 to use the service and also from agents, who will pay 0.2% of the property’s value but get the first 100 sales free to try the service.
But will it be a success? Steven Lang again: “Anything that takes out cost and adds transparency to the property sales system and lubricates it is a good thing,” he says.
It may still not be a subject to set a dinner party or a pub chat alive. But it’s coming, and in the medium-term, estate agents ignore it at their peril.