The UK PropTech Association (UKPA), in conjunction with PUBLIC, has released a new report outlining the role PropTech has to play in unlocking growth and addressing challenges in real estate.
The report, ‘The Opportunity for PropTech: Leveraging Technology for the UK’s Built Environment’, was commissioned by the Ministry of Housing, Communities and Local Government (MHCLG) to support its Digital Planning Programme and contains a number of measures designed to deliver growth and drive investment.
These include establishing public-private partnerships to drive testing and deployment of PropTech innovation, as well as a cross-government PropTech Innovation Service and data standards that support a digitally enabled marketplace. Other proposals include defining an industry roadmap highlighting obstacles to investment, along with the identification of opportunities for collaboration with public bodies, particularly for targeted place-based PropTech interventions through co-financing models.
The report comes amid a significant increase in investment opportunities for the sector, given its projected growth potential of 19.7% by 2032 and its relative strength despite the challenging macroeconomic situation. It also highlights the scope for the real estate sector, currently estimated at £18.6trillion in asset value, to benefit from the adoption of modern technologies that can increase productivity, efficiencies, and transparency.
The report states that, were the PropTech sector to be scaled up across the UK, it has the potential to provide economic and social benefits, equivalent to other more mature markets such as FinTech, Energy Tech and Life Sciences. This would closely align with the government’s agenda to grow the economy, support the modern industrial strategy and help to deliver new housing.
It also highlights the important role that both central and local government has to play in the sector’s future, due to their significant collective purchasing power (estimated at £636million per year) across departments, public bodies and local authorities buying PropTech services.
As well as highlighting the potential benefits for the PropTech sector, the report also identifies a series of barriers that need to be addressed to fully unlock this. These include the lack of up-to-date and accessible research that highlights the growth potential of the sector to provide clarity to investors.
To address these, the report proposes twelve recommendations aimed at fostering enhanced public-private collaboration to support the growth of PropTech and that of the wider real estate sector. These include:
For government/regulators:
- Identify and communicate priority policy areas for leveraging PropTech innovation.
- Provide strategic direction for the PropTech sector and the broader built environment ecosystem to provide certainty for collaborative interventions between industry, government, academia and investors.
- Establish public and private partnerships to drive testing and deployment of PropTech innovation towards high-value use cases, and cross-disciplinary research in the sector. This could include more targeted investment which enables public/private value partnerships.
- Establish a cross-government PropTech Innovation service that puts PropTech at the core of accelerating the delivery of policy ambitions across the built environment.
- Enable the Government Property Agency and other cross-government departments to become more mature buyers of PropTech through direct procurement and appointment.
- Establish and scale open data standards that support a digitally enabled marketplace – especially for strategic planning, infrastructure and net zero.
For the real estate industry:
- Work with PropTech companies and users to develop accepted, consistent ROI and performance metrics to quantify the value of PropTech solutions.
- Define an industry roadmap, particularly highlighting relevant obstacles to investment in different areas of PropTech, alongside potential incentives and solutions.
- Identify opportunities for knowledge-sharing, technical coordination, collaboration and commercial synergies across key PropTech companies.
- Identify opportunities for collaboration with public authorities, particularly for targeted, place-based PropTech intervention.
For PropTech companies:
- Work with users and government to develop a common performance evaluation/outcomes data monitoring framework for PropTech firms to enable consistent capturing of the impact of PropTech on high-value policy ambitions.
- Utilise market insights and industry engagement to inform product roadmaps, business planning, and build more detailed use cases that clearly communicate value proposition, ROI, and scaling pathways.
Sammy Pahal, managing director of the UK PropTech Association, said: “As one of the most valuable asset classes in the global economy, the UK property market holds immense potential to drive innovation and deliver transformative outcomes across regeneration, sustainability, and investment. Yet only with radical collaboration across both public and private sectors can we truly capitalise on the full potential of PropTech in unlocking significant growth and digital innovation across the sector. This report serves as a critical starting point for galvanising the adoption of PropTech, offering a foundation for deeper understanding, collaboration, and action and we commend MHCLG for recognising the importance of this sector.”
Johnny Hugill, director of PUBLIC, said: “The UK has one of the biggest and fastest growing PropTech markets in the world, with over 800 companies that can help tackle critical challenges across the built environment. This report shows how strategic collaboration between industry, government, and the PropTech ecosystem can unlock transformative benefits for the public and private sector and support the delivery of government ambitions like delivering new homes, regenerating neighbourhoods, and decarbonising buildings.”
