UK housing market: Is PropTech changing the way people house hunt?

COVID-19 has changed many aspects of our daily lives. The housing market is one area that has had to adapt rapidly to these changes. This article examines the attitudes of UK house hunters towards new technologies in the market, including virtual tours.

The UK housing market has been red-hot during the pandemic, fuelled by a rise in home working and the fact that people have been spending more time at home. In September 2021, mortgage lender Nationwide said that prices had risen 11% in the year prior and remained 13% above pre-pandemic levels. At the same time, the industry has been making rapid advances by adopting property technology (or ‘ PropTech’) that allowed for markets to continue moving while respecting social distancing and other COVID-19 measures.

Now that restrictions are easing in the UK, agencies and customers alike are finding that these technologies have a wider use beyond the pandemic. To investigate the state of the UK housing market and explore customers’ attitudes to new technology, we surveyed over 1,000 people who bought a house or apartment —or began renting one— in the past three years.

In this first part of our mini-series, we look at overall property trends and the experience of viewing properties remotely. In the second part, we will examine estate agency software and other PropTech innovations in more detail.

You can read the full methodology for our survey at the bottom of this article.

How has the pandemic affected the UK housing market?

The number of property transactions in the past two years has been heavily influenced by pandemic lockdowns, according to data from Which. These ranged from a low of just over 42,000 sales in April 2020, to nearly 200,000 in June 2021. 

It would be reasonable to attribute the surge in house purchases to the fact that people had to spend more time at home during lockdowns and when working from home. They realised that they either needed more room because they were spending more time there or could move elsewhere as they weren’t tied to a location that was so close to their workplace. Indeed, respondents to our survey who said they bought a new property in the last three years cited their reasons as wanting a change in location (42%), or to gain more space (39%).

However, the number of buyers who said they moved specifically for pandemic-related reasons was fairly low. Only 8% said that remote work had allowed them to move further away from their workplace, and 6% said that the pandemic caused them to reassess their home situation.

Although the home market is buoyant, a plurality of buyers we spoke to (43%) paid under the listing price when buying a home. 20% said they did exceed their budget, however, with 35% of this group paying 10% or more above what they had planned to spend.

What PropTech do homebuyers and renters use?

Unsurprisingly, technology plays an important role in the home buying and renting processes, especially during the initial phases of searching and viewing. 50% of all respondents to our survey used an online enquiry form at some point (the most commonly used technology), and 41% used online appointment scheduling and electronic document signatures. 40% used a mobile real-estate app.

Most home searchers (75%) also used an online property marketplace such as Zoopla or Rightmove as their main search channel, far outstripping other online or in-person search methods.

When searching for property online, potential buyers and renters can access a huge array of information about a property, but the most important was imagery, according to our survey. 87% of the group that used an online marketplace or agency in their property search said that was “very important”. Other highly relevant features were the protection of their data and search filters (the ability to search for a property by location, price, type, size, etc.), which 76% and 72% respectively rated as “very important”.

Some of the less sought-after features include the peripheral technological tools. 29% of respondents said that the availability of an app was “not important”. 26% said the same about a responsive online chat, and 24% said they did not consider virtual reality (VR) and augmented reality (AR) visits of the property to be important. We will explore VR and AR visits in more detail in part two of this series.

What are the benefits of virtual tours?

Virtual property tours allow sellers and agents to show a listing without having to let a viewer into the physical property. They can be made with 3D technology, 360º cameras, or as a pre-recorded video walk-through and were especially useful during lockdowns where social distancing measures made it difficult for people to attend in-person viewings.

47% of buyers and renters in our survey said they did a virtual tour when considering a property in the last three years. However, 53% did not, most commonly because such a service wasn’t available to them. Of those who said they had no interest at all in trying a virtual tour (3% of all survey respondents), concerns about the underlying technology and whether it would be difficult to use or inaccessible were very low. Only 10% of this group gave these reasons for not being interested in virtual tours.

Virtual tours seem to be successful. Of those who did one, nearly all said they were helpful (58% said ‘very helpful’ 41% said ‘somewhat helpful), and 19% ended up buying or renting based solely on this viewing. The main benefits appear to be practical rather than pandemic related, suggesting that virtual tours will remain a feature of online property searches. 74% of those that did one said that they save time (by allowing viewers to judge whether a property is worth visiting in person) and 68% said that a major benefit is the fact that virtual tours can be done at any time. 

In summary

• While the UK housing market is moving quickly, few respondents say that they moved for reasons specifically related to the pandemic.
• A plurality of house buyers paid under the listing price in the past three years.
• Online property portals are the most popular search tools, with imagery, data protection, and search filters the most important features.
• Virtual home tours remain popular for reasons of convenience rather than their social distancing benefits.

Next time, we explore more about PropTech, including the popularity of virtual-reality house tours, opinions about property apps, and the level of trust people have in digital signatures.