We look into future trends that could happen to the property industry over the next 10 years.
A rent only world?
Flex office led and the death of the traditional lease
In simple terms, blockchain is a way of passing information from one place to another in an automated and secure process.
A block can store information like transactions from online purchase but uses a digital username rather than using first or last names. No block is the same and all have a unique code that allows you to tell apart different blocks. Transactions are verified differently from a typical receipt, instead, a purchase would be validated by millions of computers around the world, the massive network of computers makes checks to see if your transaction is valid.
What makes Blockchain so secure is its ability to stop fraud, if one block is proved to be tampered with then the entire chain of blocks would be falsified, this takes away any need for a middle man and can also remove the need for charging for transactions because blockchain is free.
What has this got to do with the property?
Just like any industry, property relies on a system of transactions from one party to another. Blockchain will revolutionise how property companies sell and buy and would remove fraud entirely from any purchase because the owner would be able to check on the identity of the buyer based on their digital identity, easily able to view their financial information securely and effectively and with blockchain being impossible to corrupt there would be no worry about fraud, with property fraud costing the land registry £10 million in compensation, blockchain would appear to be a resolution to these issues.
Blockchain will speed up the process of lease of contract, according to online property execution platform ‘Clicktopurchase’, a blockchain transaction completed in just one week. The potential for growth is undeniable and looking into the future we could see property sales dominated by a safe, secure and fast transaction process.
Fact ‘The first UK property purchase using blockchain was recorded in Manchester’
A rent only world?
Currently around a third of homes in London are rented, with the figure expected to grow by 40% over the next 10 years. This could mean by 2030 we could be in a world where most homes are rented. As urbanisation of major cities and rural areas will grow at a considerable rate, 68% of the world population areprojected to live in urban areas by 2050 according to the UN. This means that not only will more apartments be built, but the percentage of renters will also be considerable hirer due to local transport links and the apartment developments offering better lifestyle experiences.
Renting a home is a far easier process compared to buying and selling a house, with a much more on-the-go and fast-paced society, we now expect the process of our lives to be quicker and easier and renting rather than buying offers a much smoother experience. A survey of 1000 renters between the ages of 18 and 34 found that 8 out of 10 don’t plan on trading their apartment for homes, the four reasons being, budget, go as you please and the landlord can handle any problems. As we go into the next decade, it can certainly be said that renting will become the major source of income for property owners and there seems no stopping the growth.
Flexible led and the death of the traditional lease
Thanks to the growth in the gig economy, the way we work and where we work has been dramatically changed, with the growth in flexible working space reshaping how many business models work, in the future we could potentially see a flexible focused property industry, with flexible working spaces set to grow by up to 30% for the next five years.
Another major change we could see happen within the next 10 years is the death of the traditional lease, as co-working and flexible begin to become a norm, there won’t be a need for a traditional property lease, with data from Estates Gazette saying that average lease lengths in five of the six big UK cities fell in 2017, compared with the previous year, this is a worrying sign for the traditional lease and a warning to all property companies that they will potentially have to change their lease models that fit the needs of flexibility rather than the traditional long term leases.