Gen-Z might not seem like the most likely heroes of the prop-tech space. This is a group who are at most 24 years old. Whilst there are no doubt some precocious talents within this cohort, it’s hard to picture many of them as the vanguard of a space that had more than £1.6bn invested into it in 2021.
It is their strength in numbers as users that will define whether a large portion of prop-tech companies are successful or not. Drones, sustainability, blockchain, mobile-first experiences. Whilst millennials may have been key instigators of these trends, Gen-Z are embracing them with enthusiasm.
But these are not just trends and interests of Gen-Z. They are also some of the key elements within the prop-tech industry. If you want product-market fit, a group who already embrace your technologies are a good place to start.
There is another key factor that makes Gen-Z kingmakers in the prop-tech space. That is how dependent on rental properties they have been forced to become. People are buying homes later and later. The average age of a first-time buyer in the UK is now 34. It was 28 in 2007. A crazy statistic that makes for depressing reading, but it shines a light on future trends within prop-tech.
The average age of a homeowner is going to continue to increase. If this trend follows its increasing trajectory, then we could be looking at the average age of first-time buyers being 40 by the time Gen-Z are in the position to purchase a home. This means that this generation will likely be renting on average for over 20 years.
One only has to look at the proliferation of rental management platforms within the prop-tech space to realise that most are sure this is a trend that won’t reverse. In Gen-Z, prop-tech has a group who understand much of the tech being implemented, and expect it. 62% of Gen-Z’ers rank having smart-home tech more important than traditional amenities such as gyms and parking.
Added to this, they are going to be renting for longer. This doesn’t just mean that rental management platforms will benefit. Home viewing software, 3-D mapping, and e-signing will benefit from increased viewings. This is due to the fact that renters move so much more frequently than home-owners. 29% have moved 3 or more times in the last 5 years. This is compared to the average homeowner who moves once every 16 years.
Renters, especially those of a young age, such as Gen-Z are more likely to house share and with soaring prices and a deficit of new available properties, they will be doing so in larger numbers and for longer. In London, the average age of house-sharers has increased to 28. That’s from a position of 23 only 3 years previously. House sharing has its own range of prop-tech solutions available from bills management to joint and several liability protection. With continued house-sharing it can be expected that these areas will experience continued growth.
One of many further areas of growth will be around tenant acceptance. Every private landlord will have their own vetting requirements. This means that tenant screening, KYC checks and guarantor services will all be heavily relied on, as the journey for tenants only appears to being expediated rather than simplified. The hoops are still there to jump through, only now landlords have better visibility on who’s going through the hoops and when.
Sustainability is a priority for Gen-Z. They will be choosing properties with this as a focus and vendors in the prop-tech space will need to bear this in mind as well in terms of their messaging, the partnerships they make and investments they receive.
All of these areas are going to be fuelled by Gen-Z. Their predicted decades of rental will provide huge opportunities in the prop-tech space. but just because the demand is there does not mean vendors will have an easy ride. This is an extremely switched-on generation, they are well informed, happy to do research and financially savvy. It’s a fantastic moment for the prop-tech space. but it will be important to keep focused on the needs and problems of the generation who will be driving them.
