Houseprice.AI and the Future Proptech 2018 conference

The Future Proptech conference will showcase the very latest ideas and technologies that the industry has to offer to a diverse set of users.
Future Proptech 2018
2nd May at the
Business Design Centre
London

‘Housing Crisis’ are two words that appears on the conference website and that are all too often coupled, as indeed are; ‘greedy and housebuilders’ along with ‘planning and delays’ and not forgetting ‘special and interests’. Everyone is calling for less rhetoric and more action, however this is not easy since the Housing Crisis is clearly not a simple problem to solve and there are always myriad and competing opinions on how to address the issues that underpin this deep seated problem.

Consequently Houseprice.AI are delighted to be selected as one of the participants in the ‘Innovation’ stream at Future Proptech and we will specifically be looking to address some of the challenges that have been set out by MHCLG by applying Big Data, Machine Learning (ML) and Artificial Intelligence (AI) to help better inform all participants and stakeholders involved with, planning, delivery and sales of housing.

We at Houseprice.AI are driven by the belief that transparency, clarity and consistency can be achieved through better data and leading edge technology and this combination allows for a more holistic approach to the housing problem. We want to show that adoption of a more data based approach, which objectively uses as many quantifiable drivers as possible, will naturally lead to more optimised and transparent solutions for all participants.

By incorporating better data and AI - everything from asset price and mix through to local, socio economic and environmental impacts - planning, construction and property demand and sales can be far better modeled and analysed; both more objectively and much faster. Ultimately this improvement to existing processes, project evaluations and decision making, then leads directly to lower costs and greater efficiencies. Here are just a few examples.

AI as a Facilitator of Sustainable Regeneration

Multiple variables, socio-economic, demographic, access to green spaces, transportation, educational, recreational can be measured modeled and visualized, thereby allowing better and more objective decisions to be made with more confidence than ever before. More importantly these can then be modeled with forward looking factors leading to a whole new level of reliability based on predominantly ‘objective’ data.

This ensures that the number, size, mix of units, building types, tenure, phasing, etc all match the actual and future demands of local neighbourhoods adding value, vibrancy and vitality to existing communities. We believe that even aesthetics, such as building heights and design issues can also be modelled and optimised to create the ideal solution for each scenario.

Rethinking the Planning Process

Currently only a few local authorities succeed in hitting their government set targets for determining Planning Applications. We are confident that using AI and Big Data will allow users an opportunity to completely re-think the Planning Process. Just one example is to introduce site specific planning policy and townscape principles within a 3 dimensional planning framework that is coordinated on a GIS mapping system; the pre-Planning phase can be reduced. By allowing more objective analysis of Town Planning criteria and better engagement of local stakeholders, the whole preconstruction phase can start to be measured in months rather than years.

Creating new housing models fit for the future

Housing solutions are now so wide ranging that to simply continue to roll out the same old formula will inevitably be a wasted opportunity. There are now a range of options in the rental sector alone which, according to the Joseph Rowntree Foundation, 1.6m in London are currently locked into now for life. These options include:

Private Rental Sector-PRS.

This product is a hybrid aimed at these who wish to spend their moderate incomes on stylish living rather than a mortgage. Theirs is a discretionary, almost hedonistic philosophy as far divorced from the’ my home is my castle’ as its is possible to be. They will change their home almost as often as they will change their car. There is also a new class of investor as crowdfunding and even multiple small investor clubs create funds which are far less specific about risk and returns, but want to invest in creating more diverse and vibrant cities.

Post Grad Housing

Most University cities struggle to retain the graduates that were nurtured there, often due to the high cost of appropriate housing located near employment opportunities. An emerging model is flatted accommodation suitable for singles or couples in the pre-family face of their lives. These units typically feature flats clustered around a shared kitchen which preserves the ‘sharing, community feel that is a step or two up from student housing but retains the comfort and excitement of communal living. Each flat has its own ‘kitchenette’ for making drinks and breakfasts within their own private living room. There may also be a guest room in each cluster to accommodate the occasional visitor as most flats will only have one bedroom. Build costs can be as low as £75,000 for a one bed unit and the model is perfect for prefabricated solutions,

Mixed Tenure Housing

As couples plan for a family, a range of tenures tailored to the security needs of the occupiers is being introduced by a number of enlightened developers. This is a variance on the shared ownership scheme, allowing tenants to secure a five, ten or even longer term lease, fixing their overheads and meaning that they can invest in better quality fittings and decoration.

There may also be an element of self-build, reducing homeowners costs even further.

Private shared ownership housing.

This used to be the preserve of the social housing providers, but a model aimed at the aspirational middle income young family allows for an element of equity building that reduces the pain of jumping onto the property ladder. The first rung is normally set at 10% and similar tranches or more can be purchased at the owners obtain funding. So after ten years a family could own their own property outright without the painful process of finding big deposits and satisfying earnings hurdles to qualify for mortgages. Crowdfunding investors are ideally suited to this investment opportunity as building voids are virtually eliminated and investments can be withdrawn on an annual basis with a ten year maximum horizon.

Conclusion

It is clear that better more objective and therefore more creative solutions can arise by using better data and technology. Ultimately the Housing Crisis, which at first glance appears almost Gordian in complexity and scale, can be unpicked and solved by using clean data, consistent methods and transparent objective processes. The housing crisis is a problem that everyone acknowledges, but it will never be fixed by opinions, only by rational decisions based on real data and through objective planning, delivery and action.

We look forward to seeing you at the Business Design Centre, Islington on May 2nd 2018.

Philip Challinor is the chairman of Houseprice.AI and was part of the architects team at Denning Male Polisano who helped convert Highbury, the former home of Arsenal FC into 700 homes for local people.



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Happy Easter from Houseprice.AI



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From gut feel to the real deal

Like the winter weather, referenda results and Arsene Wenger’s future, forecasting property values is a risky business.

We can all be experts on past transactions but predicting the fair price for a property today, yet alone tomorrow, needs more than just the ‘I know my patch' gut feel that influences the majority of property transactions.

In the past rising markets have covered over a trail of over-optimistic estimations, minimising Professional Indemnity Insurance claims. But with uncertainties likely to continue to affect the market for several years, and with billions of pounds put at risk, much smarter and objective advice is demanded by a customer base that has increasing thirst for more information, thanks to mobile Apps and widgets on their smartphones.

Artificial Intelligence (AI) and Machine Learning (ML) have been around for over a decade in the banking sector and yet have made very little impact on the world of property. That is until now.

When these are paired with Big Data and powerful Cloud based processing capacity, the next generation of valuation toolkits can be delivered to users, which are far smarter and responsive than those built with MRA and standard matrix analysis, methods which currently form the basis of most AVMs (Automatic Valuation Model).

The ML is constantly reacting and learning from changes in and around the marketplace and can be trained to look at other marketplaces to broaden the range of issues to be considered within a single valuation. Thus the components affecting the valuation criteria are being constantly adjusted as millions of bits of new data are assimilated.

As soon as a property sale is recorded on the Land Registry, a new public transport route announced, a new school opened, or an increase in local air pollution levels registered, the AI system will model the impacts, produce a modified valuation figure and then model the outcomes in a number of different ways, advising on the most likely scenarios.

These scenarios can also be further processed within industry specific hybrid models that combine specific levels of sophistication, maximising the ability to use the information creatively, yet ensuring accuracy and reliability. This allows, for instance real estate developers to work within much clearer risk parameters.

Does a developer continue to build residential blocks to sell, revert to a wholly or partial rental scenario, or sell on and move onto the next project? All scenarios can be modelled, stress tested and risk assessed.

There is now no need to wait until the market conditions ‘have picked up post Brexit’ or the ‘overseas investor becomes more comfortable’ or even that ‘new government initiatives will re-ignited a stagnant marketplace’.

Decisions can be made now on a vastly more intelligent prognosis than ‘gut feel’ and a list of apocryphal or redacted sales comparison list.

Who knows, with the ability to assimilate vast amounts of hitherto undreamt of information, AI and ML make real estate valuation a science and not just an art. A science that does not depend on the hunger of the buyer, the desperation of the seller. or the charm and salesmanship of the broker.

Arsene’s next career?

Philip Challinor is the chairman of Houseprice.AI and was part of the architects team at Denning Male Polisano who helped convert Highbury, the former home of Arsenal FC into 700 homes for local people.



If you would like to know more information about Houseprice.AI , Horizon, or access to our API please feel free to contact us at info@houseprice.ai.


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No business like snow business for AI

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Analysis of London borough rental properties EPC - compare boroughs

One of the most visible indicators of the UK’s commitment to battling global climate change is the ubiquitous Energy Performance Certificate. This colourful barchart lookalike is not only on electrical appliances but has also featured on every estate agent’s brochure for the last ten years.

Most of us assume that they are a reasonable guide to the amount of energy that we will need to pump into our homes to keep us warm over Christmas and like the new dog, it is with us for life. But it looks like we could all be in for a shock as inconsistencies have cropped up in the system that suggest that pre 1920’s properties are causing anomalies which require a re-calibration of the EPC system.

On top of this from April 2018, any rental property will need to achieve a rating of E or better. With 20% of the housing stock under public sector control and approximately 20% of these properties being below the E rating, this should be seen as a call to action.

Houseprice.AI’s analysis indicates that London’s local authorities have over 110,000 properties that are not just below the EPC rating guidelines, but are also of the age before cavity walls, double glazing, insulated attics and efficient boilers. Continuing to ignore the need to upgrade these properties, is as misguided as buying new buckets, when we really need to spend money on the roof.

Houseprice.AI can also demonstrate that 25% of these properties are in areas where additional investment is also likely to lead to higher than normal ROI’s as the average price per sq ft is in excess of 10% higher than the value of the properties.

In a typical London Borough, we have identified houses in one street owned by the Local Authority which are identical, apart from their poor energy performance, to their privately owned neighbours. Not surprisingly the Local Authority Homes are achieving sales prices of 40% below their real market values. In this street the value range from the highest to the lowest is 200%

Retrofitting the poorer quality housing to achieve an A or a B rating will cost around £15,000 for a typical 3 bedroom home, but could yield a return of 25 to 30% based on rental uplift, as well as saving 50% of the energy bills.

What dog would not be happy in that new home?

Philip Challenor
Chairman
Houseprice.AI

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Data Cleansing for AI

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Houseprice AI is selected by PWC

Houseprice.AI has been chosen as the sole UK company to take part in the PWC Collider Accelerator program. Houseprice,AI was selected to be one of the 12 successful candidates from a highly competitive field of nearly 300 global applicants.

PWC aims to take the most innovative companies using Artificial Intelligence, Big Data analytics and Machine learning, and honing their business models for the international marketplace.

Click this link to read the full PWC announcement

Houseprice.AI COO Rob Marsden who championed the submission said:

"the PWC qualification process was extremely rigorous and forced us to ask searching technical and commercial questions of ourselves, many for the first time. It is a great accolade for the team to know that our answers chimed with such a major international advisor as PWC."

Founder and CEO Eldred Buck added

"We are delighted to be selected from an intensely competitive field to work with PWC in Europe”.

If you would like to know more information about Houseprice.AI , Horizon, or access to our API please feel free to contact us at info@houseprice.ai.


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Do you need more insight?

Introducing Insight

our latest Horizon module

Distill billions of data points to help you identify emerging areas with steady home appreciation and high rental returns.
Compare different areas to identify opportunities. Filter by data indicators including sales value, number of sales, rental yield and more.

Click the location report in the pop up window and drill down into detailed reports on that postcode.

Analyse Trends

Quickly and easily view across England and Wales residential property market using the heat map.

Monitor Risk

There are an increasing number of schemes which are being sold by traditional housebuilders looking for risk reduction in a less than certain new build flats marketplace.

With access to the most up to date supply, demand and price data, you can significantly increase risk awareness in your portfolio.

If you would like to know more information about Houseprice.AI , Horizon, or access to our API please feel free to contact us at info@houseprice.ai.


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