A message to all Stakeholders

In light of the recent headlines concerning Cambridge Analytica and Facebook, we would like to make the following clear to all of our clients and any other stakeholders in Houseprice AI.

We, like many new fintech/proptech firms, use Big Data, Social Media and AI as a major part of our business activity and of the services we offer. So even if all of our data sets are always anonymised and encrypted and we obviously already follow all the General Data Protection Regulation GDPR which takes effect on 25 May 2018, we additionally have one basic rule. We never do anything in business that in turn, we would not want done to us, as private individuals ourselves. It’s a simple rule and powerful, but treating others as you yourself would wish to be treated, is effective and common sense. Some call this business ethics, we would call it a fundamental right of all us.

If you have any concerns about how your data is being used, please feel free to contact us on support@houseprice.ai at any time.

Many thanks

Eldred and the Team at Houseprice.AI

Eldred Buck is CEO and Co-Founder of Houseprice.AI Ltd and a Non Executive Director at Sequant Capital. He has over 25 years experience in capital markets and banking, specialising in quantitative models and derivatives trading across all major asset classes. Previously he founded Eiger Trading Advisors, a leading fintech company.

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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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

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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Data Cleansing for AI

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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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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How do 2017-2018 students pay the rent?

The Government has increased the maintenance loan for students starting in September 2017 which means that freshers will be 2.8 % better off than those who are already doing their degree. This increase is matched by an increase in tuition fees by 2.8% in line with inflation which pretty much nullifies any benefit.

In London rental prices have decreased slightly, according to the Guardian, the typical new rent in London has fallen by 3% in a year, but the cost of food has increased by 2.3 % in the last 3 months and transport has risen. The Office for National Statistics said the Retail Price Index (RPI) measure of inflation, which is used to calculate train ticket prices, rose by 3.6% in July, up from 3.5% in June.

The Government expects parents who earn over 25 K to subsidise their student child. This varies enormously throughout the country, and sticks a hefty burden on parents looking at the rental market depending where their bright spark has decided to study.

For example take 4 sets of average parents in the Midlands all of whom earn over 50K
EC studies at Manchester. GW studies in Leeds. EB studies in London. LC studies in Sheffield. All 4 receive a Tuition loan of £9000.

Manchester Sheffield Leeds london
Tuition Loan £9000 £9000 £9000 £9000
Maintenance £5256 £3994 £5256 £5479
10 mths rent £6190 £0 £2320 £7312
Surplus £934 £3994 £2936 £1833

This means that the maintenance loan for GW and LC, who commutes from home, not only covers their rent but also gives them money for transport and food, maybe even the odd book, heaven forbid. We do remember they are supposed to be studying and even ebooks cost money?

LC has the best financial situation, although living at home may not give a student the life lesson of independence, budgeting and the social freedom living in student accommodation allows. EB has the worst situation. Her Maintenance loan does not cover her rent and her transport costs are higher in London. Like EC she needs financial assistance from her parents just to pay the rent, only twice as much. Food, transport, clothes, all this has to come from somewhere, and yet if you remember, our sample set of parents all earn roughly the same.

Parents with enough savings, or their own mortgage paid off may consider investing in accommodation. Outside of London the market is still slowly rising, but within housing has dipped. The Office of National Statistics (ONS) records London experiencing a £3,000 drop in the average price of a home to £482,000 in June from the previous month, but remains the most expensive UK region in which to own a property. So the investment may not be as sensible as it seems if they are left with a mortgage for a property that is worth less than they bought it for in 3 years.

This is not just in London, one of our clients recently shared an anecdote about student accommodation in Portsmouth. He was looking at the value of a flat that had previously been rented out to students. The owner reported that the value was now slightly depressed as a new student block had been recently erected adjacent to his property. Students who had previously lived in the surrounding area had moved into the new accommodation which resulted in the value of the previously tenanted housing dropping.

According to a recent survey on savethestudent.org 80 % of students worry about money. Apart from scrounging money from friends, family and credit cards, many students are forced to work to supplement their income, often adversely impacting on the amount of time that they have to study. Parents without significant savings are taking out second mortgages or even relying on their own parents to help.

This also makes the student applying for a University place take the location into consideration. A University with a short commute time from home gives them the option of living at home and not having to pay any rent. Those outside London also have a small surplus of cash after paying rent. These students actually have the funds for a social life. Remember that?

Students at universities outside London pay significantly less rent so opting for a University based on location rather than the course is becoming increasingly more biased. Surely that is wrong, the emphasis should be on the aptness of the course not its location.

We haven’t mentioned that there is a proposal in the pipeline to increase tuition fees to £9,250. This is not only for new students, but also existing ones. How can this be when they have signed a contract? Apparently on page 3 of this contract the Government has the right to increase the fees at will, giving a further financial strain on this loan that will be with the student for the next 30 years. Interest rates on loans are rising to 6.1%, which will push up average student debt on graduation to more than £50,000, including maintenance loans. Students in England leave university with higher debts than almost anywhere else in the developed world, the Institute for Fiscal Studies said in July.

Charging £9,250 a year for an undergraduate degree makes England a real outlier by international standards. Even in the UK England does not compare well, Scotland has no fees for Scottish students, and fees in Wales and Northern Ireland are much lower.

There is no reflection in the cost of tuition as to the amount of hours the student is getting for their money. Those studying science require far more hours than those studying, say, English literature or history and yet this has no bearing on the cost of tuition.

Overall location pays a key role in the financial balance for both parents and students. But just remember, it is only for 3 years. Unless they decide to do a PHD of course!

For more information on Horizon contact: info@houseprice.ai 

https://www.gov.uk/education/funding-and-finance-for-students https://www.theguardian.com/business/2017/mar/13/uk-average-annual-rents-fall-stamp-duty-hike-letting