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Daily bite-sized proptech and property news in partnership with Estate Agent Networking.
Will the Department for Levelling Up become the Ministry of Silly Walks?
In 1970, John Cleese and Monty Python performed a skit in which a government department invents silly walks which are to be grant-funded. The piece was a satirical take on the civil servants in Whitehall who dream up grandiose ideas with little regard for reality, timescales or budgets.
Now Michael Gove is the incumbent housing secretary, it would seem that the actual ministry has become a modern-day pastiche of that famous skit. The Ministry of Housing, Communities and Local Government has now been rebranded as The Department for Levelling Up, Housing and Communities.
Give it a few months and it may well become The Ministry of Silly Walks, Levelling up, Levelling Down, Housing and Communities…or MSWLULDHC for short.
Andy Haldane, the former Bank of England chief economist, is to head up this levelling up taskforce, an invention of Boris Johnson in the recent cabinet reshuffle. Haldane said in The Guardian recently that the job of this new outfit is: “to design and deliver an economy that works for every part of the UK.”
So, it looks as though housing is now going to be hitched to Boris’ Bandwagon of Desperation in the hopes that he and his cabinet might make it to the next general election with a shred of success to show for their tenure.
But let’s not forget, Michael Gove has an annoying habit of being parachuted into troubled areas of government and creating chaos before performing an elaborate disappearing act, leaving everyone connected to him holding the bag. Haldane, who Boris has backed publicly for his credentials, will answer to Gove and the PM.
Will he be left in a similar situation? Time will tell.
Sunak’s SDLT giveaway finally ends in nine days. What next?
The 30th of September draws near, and so too does the final, final deadline day for the stamp duty initiative.
Given that the UK housing market now has very few properties on the market, has the government made a critical error by encouraging a stampede of homeowners in a concentrated timeframe?
One thing’s for sure, it’s forced house prices up and distorted the usual ebb and flow of the housing market.
Despite Rightmove’s recently released upbeat message about the housing market, the reality is that agents in the UK have less inventory per agent than the preceding years, and new instructions are trickling in with super inflated price tags.
Some property pundits are drawing comfort from the fact that the scarcity of unsold property is keeping prices high and the sales cycle to a minimum. On average, a sale occurs in 35 days against a typical sales cycle of over 60 days earlier in the year.
But if there are only a few houses on the market, and only a few coming to market, then the housing market has slowed. The first sign of a slowing market is people not moving, which means less inventory. Sooner or later, they’ll run out of things to sell.
Traditionally, the selling and listing season for estate agents runs until late October, with Halloween heralding long dark nights, weekend viewings, and a general slowdown as Christmas looms. Hope begins to rise once again in mid-January that the house moving public will shift into gear.
It’s true that 2021 has been anything but a normal year, and the vitality of the housing market has certainly been a surprise to all.
However, are we now entering a very different type of housing market, one where sky-high properties do not sell as they once did due, in part, to the tinkerings of an untested Chancellor with a penchant for poorly planned initiatives?
Are commercial partnerships the new proptech holy grail?
In various forums over several years, proptech has sought to be denounced by traditionalists who point to the fact that software developers are creating solutions for problems that have little commercial traction. They’re not completely wrong. The Software as a Service (SaaS) model only works if an end-user actually pays for it.
To overcome this, a new form of commercial partnership is emerging. Corporates are identifying their problem first before external proptech companies build out the solution for them.
So, unlike the situation that was happening before where a founder might have a eureka moment and start producing a solution to some irksome problem they encountered, this new model is being replaced by a corporate with a well-defined pain point that is willing to partner up with a technically-minded proptech founder to find a solution.
Our insight tells us that in the past two months alone there have been four major commercial tie-ups like this taking place in stealth mode, which is probably a better way of operating due to inevitable changes and redesigns.
Ultimately, the benefit of this model for the proptech is that they don’t need to worry about runway and chasing more cash to build the solution. If they can provide an MVP and find a market fit to the satisfaction of the commercial partner, then financial rewards will result.
What the corporate gets out of this exchange is a commercially viable, scalable solution and mitigated risk – assuming their idea was correctly validated in the first place.
Believe me, I’ve seen enough failing proptechs to know that the validation stage is very much lacking.