By Andrew Lloyd, Managing Director, Search Acumen
A few weeks ago I met with Estates Gazette to discuss my views on how to future proof the legal sector as well as the innovations that will transform real estate transactions.
The current pace of change
While we have witnessed forward momentum in recent years through new digital tools and the release of data sets by HM Land Registry (HMLR), real estate transactions in England and Wales still take longer to complete than many of us would like.
In the legal real estate sector, we continue to see law firms preferring to rely on paper-based due diligence processes, Microsoft Office or PDFs to share information. These processes have served them well for years, and they see little need to change or modernise.
At the same time, the hands of private sector companies are tied as a result of public bodies’ failing to upgrade to digital information on land and properties. While our real estate industry is highly trusted and attracts steady international investor interest, it risks losing its global competitive advantage if it remains manual and clunky.
The Government recognises this, but as digitalisation takes large amounts of investment and time, often without an immediate reward, the pace of change is slow.
Adopting a digital mindset
Having founded Search Acumen as a specialist real estate data company, data is in our DNA. We have always actively sought out innovation in order to improve the legal sector which we serve, creating technologies like ForeSite, our online platform that allows property lawyers access to real estate data and ownership structures at a touch of a button. But I fear that our outlook is in the minority and too many firms in the real estate business have been working like business as usual.
The time to adopt a digital mindset is now. We regularly review the real estate legal sector through our Conveyancing Market Tracker and the key trend we’re seeing is of increasing consolidation. At the start of the year the market contracted to fewer than 4,000 active legal firms for the first time on record.
It is this kind of worrying trend that prompts us to stop and look around at other sectors that have experienced similar contractions – from retail to banking – proving that inaction in the face of digital evolution is a killer. Lawyers have to capitalise on the opportunities that technology presents, or they risk going in the same direction as House of Fraser.
But, if they can embrace digital tools and begin to provide high quality, more innovative and digestible advice to their clients, the rewards of adopting a digital mindset far outweigh the risks.
Future innovations and opportunities
To my mind, blockchain is the equivalent to the “Uber moment” in the real estate sector. It will have an impact on intermediaries from estate agents to mortgage lenders, and presents a huge opportunity for forward-looking firms who embrace the technology.
Blockchain has the potential to drastically improve trust in the transaction process as well as the speed. Through distributed ledger technology, there will be greater control on how information is given out and verified. This helps to mitigate some of the concerns that have rightly been raised around the ethics of data collection.
When it comes to data collecting, it’s clear that the genie is out of the bottle and cannot be reversed. However, data does require regulation in terms of how it is used. It is up to regulators to equally adopt a digital mindset, become more tech-savvy and ensure that they keep up with the pace of change.
The future is bright
Overall, the future of the property sector is bright and there are many instances where real estate transactions are soon to be improved. An example which interests us right now is the use of an app to view property and land data at the touch of a button.
With consolidation of the property legal sector unlikely to slow down, we firmly believe that it is the firms who embrace a technology and a digital mindset that will get ahead.
You can hear the full discussion at Techtalk Radio, online here.