Paul Davis, co-founder at Nimbus, describes how reliable data, technology and the insights they provide are the keys to unlocking development opportunities
The property and development sector has undergone a shift over the past few years, revealing the importance of digital construction tools.
Continued growth relies on keeping up with the industry’s pace, which is why digitalisation is essential.
The construction industry is facing challenges at every turn, and the pressure on developers, investors, architects, and planners is only increasing in scale and pace.
While there is evidence that digital tools and data platforms are helping to tackle the challenge, the full potential of these tools is still not being fully realised.
Navigating planning reforms amidst the pandemic
The impact of the pandemic accelerated many elements of the property sector, effectively bringing five years’ worth of changes forward into one.
Many of these changes were within the planning process, which has historically been a major obstacle for developers. In a bid to revitalise the high street and empty office space, the government introduced Use Class E in 2020, which brought multiple business, commercial and service use classes under one roof.
This was a significant overhaul, particularly as a change of use within the same use class does not constitute development and, therefore, does not require planning permission.
To put this in context, a business owner could turn their office into a gym, then into a shop, and then back to an office, all without obtaining planning permission (subject to site specifics), because these changes would not constitute development at all.
This gave property owners more freedom to be able to adapt to public demand and survive the challenging landscape, without having to navigate lengthy processes and red tape.
Furthermore, in 2021 Class MA was introduced to allow a change of use from Class E to residential, subject to prior approval, replacing Class O (office to residential) and Class M (retail to residential). This has been a pivotal step in helping to open up more opportunities for residential developers, particularly amid a housing crisis.
Within a recent update, the government announced that the previous limit of 1,500 sq metres and the requirement for a building to be vacant for three months before submission have been scrapped, further enhancing the opportunity created for property owners and developers.
These planning updates have inspired an increased uptake in requests for data and other digital construction tools.
Harnessing technology for property acquisition
However, when you consider the practical challenge of acquiring buildings within specific class uses, sizes and locations that have a particular set of planning policies applying to them, it can be incredibly difficult to ensure everything on the checklist is met.
In addition, it can be particularly hard to find the specific planning policies that apply and which specific buildings fall within those areas and which do not, making acquisition particularly time-consuming and potentially expensive.
Technology in the sector has therefore become a vital element in unlocking these new opportunities, by being able to efficiently find buildings that meet the requirements developers are looking for.
In addition to checking planning policy on a building-by-building basis, they can also calculate a building’s financial viability for commercial or residential uses, which is a huge benefit to property owners and developers looking to find the best way to grow in today’s market.
While this seems like a no-brainer, it requires a real change in behaviour to seek out, understand and trust data in this way.
Traditionally, the property market turned to properties that were being marketed for sale or to let with a local agent to find potential deals, but we can now look at the problem first and filter out any of the opportunities that don’t work so we can focus in on those that do.
In addition, data can be sourced on properties off-market to allow investors and developers to target building owners directly and avoid the competitive nature of buying sites on the market, which generally opens up the potential for better deals.
There is often a challenge in adopting technology to support a digital construction approach, and that is knowing where to start – there are many proptech solutions out there solving really quite niche problems, so it can be a daunting job for the user to identify and source what is relevant for them and often a suite of products might be needed.
Overcoming some of these obstacles will open up data to more clients, who will then make better-informed decisions.
Looking ahead: The evolution of AI in proptech
As changes continue across the property industry, so do technological advancements, and it would be unwise not to mention the impact of artificial intelligence (AI) and its impact on the proptech sector.
Even before the world of ChatGPT, AI has been used in countless ways to support data gathering, cleansing, insight creation, and analysis—it has been used in its raw form for these methods successfully.
Newer products using more openly available AI are not quite there yet, but there is certainly room for this to take off.
I can see a world where the type of work being done by consultants that helps to inform our technology could certainly be supplemented by, if not replaced with, AI—but whether it would work in the same way or understand the nuances would be the question.
So much detail has to be inputted to get AI to understand a particular development site and the surrounding area it sits in, and the UK planning system is particularly tricky to navigate as it looks to balance this correctly.
That said, the planning policy of other countries can often be simpler, and as such, this may well be proved overseas before it appears in the UK, but it’s a space to watch.
One important factor of AI and digital construction is understanding that its role is not to replace people’s jobs but to better use their time and contribute more to their aims and ambitions.
With the time saved from utilising data to source ownership and planning information to unlock more opportunities, the whole sector benefits from improved productivity.
For individuals, there is time given back to spend on other important tasks and with the overall time saving then valuable tasks that would otherwise have been too time-consuming can now be completed.
Investors can find better deals, property professionals can have all the information they need to provide great advice at their fingertips, and surveyors can work quicker, allowing them to spend more time building relationships – which technology will never replace.
Our aim in the proptech world is not to make construction completely digital but to take on the heavy lifting, allow businesses and individuals to boost their offerings, and open more lucrative opportunities.
