"The market may not quite be ready for ‘robo advice’ but this type of service will, in time be helpful for the financially astute borrowers who need guidance"
93% of UK home buyers are using online channels to research their property search, ahead of the global average of 83%, according to HSBC research.
More than half (51%) of recent home buyers started talking to an estate agent online as opposed to in person.
HSBC says the rise of property websites offering financing, negotiation and conveyancing services could see the future entire home buying process, from search to completion reduced to a matter of days.
The bank also believes that artificial intelligence will assist by analysing personal data, assessing lending criteria and narrowing down product options, enabling faster mortgage approvals.
Dealing with the many people involved (estate agents, solicitors, sellers and developers) was identified by 34% of recent home buyers as the most stressful part of the home buying process, followed by understanding the legal paperwork (21%) fees (19%) and negotiating the price (16%).
These pain points have pushed home owners to use online sources first, making the purchase process much easier and reducing the number of people involved in a sale, so that buyers and sellers feel more in control.
Despite the digital trend, there is still reluctance to fully digitise the home buying experience, particularly when it comes to finance. Traditional sources such as mortgage providers (41%) and family (46%) remain the most trusted sources of mortgage advice amongst millennials. Only 14% of millennials embrace the idea of using robo-advisers such as chatbots and humanoids for mortgage advice.
Tracie Pearce, HSBC UK’s Head of Mortgages, said: “The process of buying a home will change beyond recognition in the coming years. The market may not quite be ready for ‘robo advice’ but this type of service will, in time be helpful for the financially astute borrowers who need guidance through just a few steps of the mortgage process. There will still be those borrowers that desire face-to-face advice, or prefer to speak with an adviser over the telephone and lenders should look to provide home buyers with a choice of channels in line with their needs and preferences”
Property Technology expert James Dearsley said: “Property websites will become considerably more sophisticated, using big data to bring more and better properties in front of prospective buyers and taking over much of the traditional estate agent’s role. There will be no more ‘fifteen minute windows’ to view a property. Virtual reality will allow home buyers to view more homes, narrow down their choice and then ‘live’ in a virtual version for several days to truly try before they buy.”