UK real estate market: How can banks leverage local property data?

Customer centricity, personalised experiences and meaningful relationships are key factors in the success of banks and financial service providers. It is also evident that real estate is the perfect anchor point for banks and financial service providers to get closer to their customers, due to it being a particularly emotional asset class. But besides these few ‘global’ arguments, it makes sense to examine the market situation at a local level in order to understand how real estate data can benefit banks and financial service providers in specific countries. This article covers the situation on the UK real estate market and gives insights into how UK institutions nationwide can benefit from leveraging local real estate data.

UK real estate market: Managing assets on the UK property market

With rising interest rates, growing mortgage rates, complex ESG matters coming to the fore and evolving demographics–– being able to manage residential properties as assets is important for the consumer in the United Kingdom.

This is particularly the case when considering the following specificities:

• The dynamic housing market (buy-to-let, asset value management, ownership structures and shared appreciation with the government for first-time buyers) –– this should be considered alongside changing demographics. “It creates challenges for first-time buyers to access the housing market and raises the question of how they can connect their savings to a housing project”, explains PriceHubble advisor Tony Prestedge.”
• The high proportion of buy-to-let landlords for whom it is crucial to have a precise and holistic overview of their properties as assets. As they invest in residential real estate, they need to ensure sustainability and ESG matters compliance and seek to maximise value and yield.
• The demand for housing outstripping supply across the country. “In such a situation, the individual value of your home becomes much more material in the context of your overall wealth”, says Tony Prestedge.

Yet, banking institutions in the UK and the EU have traditionally separated real estate investments from other investments explains Tony Prestedge, he also goes on to say: “Today, if I open my banking app, my dashboards show me how much I owe but not how much my property is worth, nor its ESG rating, nor an overview of the latest developments in my area."

But the situation is evolving: “Consumers started to really want a 360 view of their property. That’s where digital disruption is happening”, Tony Prestedge says. “In a market where retail banks, brokers and real estate agents will have to fight much harder to find and retain customers, it becomes crucial to be able to use data to gamify the relationship, make it more interactive.”

UK real estate market: Embracing customer centricity by leveraging data

Despite a tense situation in the UK economy, the UK real estate market presents a significant opportunity for financial institutions to diversify their services and establish deeper relationships with their customers. By leveraging real estate data, banks, wealth managers, and service providers on the financial market can offer personalised experiences and create a high-value bond with their clients. However, it's also important to note that local differences in real estate markets can greatly impact the strategies and approaches that financial institutions should take. For a more in-depth look at how financial institutions can use real estate data to their advantage, download our ebook below: