Kai Peeters, the founder and CEO of HiP, an upcoming blockchain and property platform, discusses how blockchain can unlock more buying powers for first-time buyers
The technology industry is making waves in every area of life, but few have the chance to fundamentally change the way we view markets. That was until the world was introduced to blockchain and associated technologies.
The UK’s distressed housing market has been broken and outdated for a long time. Reliant on the same traditional financing options that were open to our grandparents, the revolutionary nature of blockchain is making the real estate market more secure, efficient and accountable. In the not too distant horizon, innovations are happening that will change the game for first-time buyers.
Even for those first-time buyers who have been able to find their dream first home, secured a mortgage and have managed to save for the gargantuan deposit, the process of buying a home is littered with additional costs.
The simple sale of a property involves a number of stakeholders: the seller, the buyer, real estate agents, mortgage providers, solicitors, inspectors and appraisers. This leads to not only an inefficient system but one that is opaque and confused. However, by creating a transparent process that reduces bureaucracy and ingrains trust on all sides, blockchain technology uses smart contracts that ensure all the required steps have been completed, and they are there for all to see, which increases accountability.
This not only reduces the amount of paperwork, which lowers the cost for buyers, but as it typically takes over a month to settle a real estate transaction, the blockchain system can speed things up. Currently tedious checks undertaken by hand, move to an automated system overseen and approved by the relevant stakeholders, speeding the whole process up.
The anachronistic way buyers access financing hasn’t changed in decades, but several innovative firms are using blockchain to change that. And that is where HiP comes in. We have developed a decentralised real estate platform that has recognised the fundamental needs of the housing market, and created an innovative financial solution which challenges the market, un-taps stored liquidity and opens an entirely new capital market.
We have filled the void left by traditional financial institutions, helping first-time buyers as well as owners of residential and commercial property. Our aim is to develop a system whereby equity becomes a currency and debt levels become a choice.
First-time buyers will use an inbuilt calculator to enter the price of the home they want to purchase, the deposit they want to put down as well as the monthly payments they can afford. The platform then calculates the remaining amount needed to buy the property, which is then offered out to investors to help raise the remaining cash. This means that the first-time buyer will own a percentage of their home whilst investors who have co-financed the property hold a share of the property. What makes this platform unique is that those first-time buyers can build up their equity over time and can increase their stake of the property gradually when they can afford to.
This gives first-time buyers access to financing options that were previously unattainable, meaning more buyers will face fewer barriers to get on the property ladder. Fundamentally, smaller deposits coupled with lower monthly payments than traditional mortgage providers can’t and won’t offer opens the door to home-ownership, and taps into a whole new market that many thought out of reach.
Blockchain based technologies can and are improving the world’s housing markets. The vast array of problems affecting the real estate markets are too complex for one solution to fix everything, but we can be sure that blockchain will play a vital part in the way we look at property in the future.
Kai Peeters
Founder and CEO
HiP
Twitter: @hiptoken
