Why should we care about residential property?
There are 29 million homes in the UK, [1] and this number is set to grow with the Government’s recent pledge to build an additional 1.5 million homes by 2022. [2] With the average UK house price reaching £250,000 as of October 2020, [3] the total value of residential property is just under £7.2 trillion, making it the largest store of wealth in the UK.
To contextualise this, it is approximately twice the value of all UK listed equities (£3.6 trillion.) [4]
For the vast majority of the population, a home is likely to be the largest financial commitment of their lives. It is also the largest risk asset on UK bank balance sheets and, as of 2020, [5] residential property lending constituted just under 20% of the UK banking systems' total assets (£1.3 trillion out of approx. £8.3 trillion.) [6]
Unsurprisingly, given these figures and the fact that housing is the most basic of human needs, the supply of homes and movements in the residential property market are some of the most important policy issues for the Government and the Bank of England. The property market impacts taxation, both local and national, interest rate policy and the setting of bank capital requirements.
All of the above begs the question– if understanding residential property is so crucial, why do we collectively know so little?
It’s all about the data...
Access to accurate data is fundamental to understanding anything - the property sector is no different. Accurate property decisions, require accurate property data.
To quote Deloitte, “data is the new gold,”...and it’s only growing in value. [7]
Agents, surveyors and property professionals alike all provide a data-driven service, and this need for fast, up to date, and relevant data will only increase with the introduction of new tech into the industry. Despite a large consensus on this, there is little verified market data available. Residential property records consist largely of inconsistent and fragmented data with no single reliable source for accessing it all.
Public sources, such as H.M. Land Registry and Energy Performance Certificates (EPCs), provide pieces of the picture, but the bigger picture requires ‘big data.’
Public records alone are insufficient, as even with a perfectly integrated set of available data, there would still be significant holes in the overall picture. Accurate and complete data is the required foundation for delivering the financial analysis of the residential property market that everyone in the UK needs.
This is where we come in...
Our mission is to aggregate this available data, clean it and reconcile it.
We are here to supply the big picture - including street ranking, market trends and much more...
Solving this problem has required the creation of an entirely new product category - Property Intelligence.
To read more on this issue and how we intend to solve it, click here to view our next post.
Sources:
[1] The Committee for Climate Change, “UK housing: Fit for the future” https://www.theccc.org.uk/wp-content/uploads/2019/02/UK-housing-Fit-for-the-future-CCC-2019.pdf, Pg. 11
[2] The Committee for Climate Change, “UK housing: Fit for the future” https://www.theccc.org.uk/wp-content/uploads/2019/02/UK-housing-Fit-for-the-future-CCC-2019.pdf, Pg. 11
[3] The Office for National Statistics, “UK House Price Index: November 2020,” https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/november2020
[4] Statista Research Department “London Stock Exchange (UK) trading: Market value of all companies Q1 2007-Q4 2020,” https://www.statista.com/statistics/324688/uk-quarterly-market-value-companies-lse/#:~:text=As%20of%20the%20fourth%20quarter,of%20companies%20on%20the%20LSE
[5] Financial Conduct Authority, “Mortgage lending statistics - December 2020,” https://www.fca.org.uk/data/mortgage-lending-statistics
[6] European Banking Federation, “United Kingdom’s banking sector: Facts & Figures,” https://www.ebf.eu/united-kingdom/
[7] Deloitte, “Data is the new gold: The future of real estate service providers” https://www2.deloitte.com/content/dam/Deloitte/global/Documents/Public-Sector/gx-real-estate-data-new-gold.pdf