Property-based fintech has mushroomed into a variety of businesses catering to consumers, investors and developers.
What is PropTech?
Property-based fintech, or proptech, is a key part of the financial technology sector that breaks down into many parts.
Fintech emerged in the wake of the 2008 financial crisis significant groups looked for better services and higher returns. Consumers looked for higher quality customer service that unchallenged high street banks failed to offer. Investors hunted higher yields to beat historically low interest rates, while small firms searched for looser borrowing limits as traditional lenders clamped down on lending to riskier smaller businesses.
UK PropTech pioneers
In the UK, portals such as Rightmove, PrimeLocation and Zoopla - founded around, or a few years before the crash - were proptech pioneers allowing house buyers to see thousands of properties offered by estate agents across the country.
However, as these services took off, new property firms followed aimed at investors opened their doors.
Different types of PropTech
Platforms such as Assetz Capital and CrowdProperty specialised in property-backed lending, while firms such Property Partner and Propio, gave investors the chance to build property portfolios online, picked and managed by teams of investment specialists. These firms offer investors returns that range from anything from 3 per cent to 15 per cent a year.
Protech firms have mushroomed in recent years focusing spanning property crowdfunding, online mortgage brokers, flatmate seeking apps and more.
The amount of global venture capital investment this sector, also called real estate tech, has attracted has jumped from $519m in 2013 to just under $4bn in the first ten months of 2018, according to data group CB Insights.
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