FUTURE PropTech 2019
Nick Kirby on Open Collaboration Digital Street- How technology can improve the planning system?
Nick Kirby
PropTech Lead
Mishcon de Reya
So, thank you to everyone for coming to hear us speak today. I'm Nick Kirby from Mishcon de Reya, I split my time between being a commercial property lawyer and changing the way we deliver legal services using technology. Our strategy is to deliver services faster, better, more efficiently. And I think everyone would acknowledge that real estate transactions need transformation. Consumers are frustrated with how slow transactions take to complete and how many of them fall over and I think planning, the sort of lack of comprehensive planning information slows transactions down, um the fragmented nature of planning policy um is- slows down development and so collaboration in planning is obviously really important in helping change the way um transactions um are carried out. But in the course of preparing for this preparation we realised it is bigger than that, its um the whole real estate lifecycle needs an injection of collaboration to help transactions work better and faster. This huge pressure from Government, regulators, consumers to change the way that property is bought and sold and so today we wanted to be a bit more ambitious about what we were talking about and we are going to talk across the whole transaction lifecycle about how properties can be bought and sold faster and um better and at that point I am going to hand over to John Abbott, Director of Digital at the Land Registry to tell you a bit about Digital Street and its impact on planning.
John Abbott
Director of Data, Digital and Technology
HM Land Registry
Thank you. Okay dokey. So hi everybody, my name is John Abbott, I am the Director of Digital, Data and Technology at the Land Registry. Um so our ambition is to be the best Land Registry in the world so we are nothing if not ambitious and as part of that we are going through a very significant digital transformation process so today inside Land Registry will process 120,000 pieces of work, 100,000 searches of the Land Register and 20,000 updates to the Land Register. Those 20,000 updates to the Land Register will all come into us via a pdf and about 4,000 will go straight back to the conveyancer because there is some kind of mistake on them or some sort of error. What we are looking to do is to transform our organisation; it’s been around for 150 years and has evolved from a paper-based process into an electronic process into something that is natively digital, a Land Registry that is sort of fit for the 21st century. And so as part of that digital transformation programme we are doing lots of work with start-ups and lots of open innovation work that we will come on to later on, in particular talking through and showing you a demo of a project we have been running called Digital Street. Sticking on planning just for two seconds, I also wanted to highlight the work of some of my colleagues at the Ministry for Houses Communities and Local Government. The digital land team are looking at how we can make more data available across the market to enable people to build more homes and so on. Um so check out their GitHub, which you can search for but if you are interested in meeting them in person, Paul Maltby, the Chief Digital Officer at Ministry for Houses Communities and Local Government, probably the longest title in the whole of Government, I’ll just call them MHCLG from now on, er are talking at a roundtable at 3.30 this afternoon so if you want to spend time with the guys talking to them in depth, that’s the place to go. They are doing things like creating a single register of planning data. Um they’ve got a project that is making all information about National Planning Policy available online in a single place and they are also funding a number of different projects that are looking at how you can improve the planning process, so working with collaborators from outside Government, thinking about how we can make data about planning more accessible and available and the whole process become slightly more automated. So name check for the guys at MHCLG if you want to spend more time, go and talk to them this afternoon. Alex?
Alex Wrottesley
Head of Geovation
Ordnance Survey
So I think as John says, the key part is collaboration. Um so I am head of Geovation, it’s an initiative of Ordnance Survey and we are partnered up with the Land Registry on creating and supporting the broader eco system of start-ups and businesses that want to work with Land Registry, Ordnance Survey, MHCLG, other Government bodies to to really understand how we can build this stuff together. We are acutely aware that this frictionless world we are moving into is moving at a pace and at a cadence that is completely contrary to our Government Departments, the work that John at Land Reg. is trying to put that more into synchronisation so that things that have been brought through from the private sector can more quickly be adopted within Government, within process and that we know what’s going on and we can work with smaller companies who need us to respond quickly. So Geovation what we do is we provide if you like a err membrane, a place for small businesses and start-ups to engage directly with these Government bodies and agencies. I say we started in 2009, we opened our first facility in 2015. Since then we have helped, our company has gone on to raise around 23 million pounds of funding from early stage investors. We issue grants to start-ups on our programmes and it’s been a really impactful initiative I think and partnering up with Land Registry 2 years ago, has let us really expand from our work we’ve done in land into a much more meaningful Proptech initiative. So I would urge anyone who has a Proptech start-up is looking for engaged support, importantly at the very early stage we work from inception through to pre-seed and on to seed funding. If you have already raised more than a million quid, we’d love to talk to you to collaborate with us but we probably can’t help you as actively. Our speciality is getting people from zero to thirty miles an hour and getting you up to that point you can get seed funded and grow. Um and I think what we have learnt over the past few years is, again this eco system collaboration is key and what we’ve found is a bunch of our companies have come to us and gone ‘you’ve got great information about land and property, great information about geospatial data, location analytics’ and these things that are driving value but there is other parts of that value chain we can work with and one of the key ones for us has been the legal tech side of things. How do you take the transactional elements of that? So two or three companies come through us and go ‘actually we want to go on this other programme’ that our colleagues at Mishcon de Reya are running who can actually fill out that and because we are public sector, we don’t have to be precious and go ‘they’re one of our companies you know’. We want them to succeed. So I am going to hand over to Nick to talk a little bit about MDR Lab and how that’s kind of tied up what we do.
Nick Kirby
PropTech Lead
Mishcon de Reya
Thank you. So MDR Lab is Mishcon’s incubator. It is focussed on technology start-ups in the legal space um and at its core it is very much like any other incubator. We obviously help start-ups grow their businesses, grow their ideas and um to do that we provide you know business and commercial know-how, subject matter expertise, some free office space and coffee obviously um and you know, we don’t have a lot of time today to go into a lot of detail on what we do so I just wanted to cover two main areas which was why would a start-up want to join an incubator whether it be MDR Lab or another one and why we love having start-ups through our doors. So we love having start-ups through our doors because it gives us access to new technology, it allows our lawyers and our employees to really engage with the awesome dynamic people that make up start-ups and more on that in a second and you know, lastly it, you know, it really enables us to drive business change in our organisation. So um we, you know the business change piece for me is probably the most important part of the Lab. Um the impact that the Lab has had on how we work, how our lawyers think about technology is so important, it’s been a massive, massive change. As our real estate technology specialist I have seen first-hand how are lawyers are now approaching technology, the way they are able to step back and think about doing their work in a different way. And from our perspective as well, the pilots that we run now with new technology just work so much better than they used to work, especially with MDR Lab companies. But people are more engaged and I think they feel that they’ve had a real meaningful part of that start-ups journey. So there are then sort of three main reasons why I think a start-up would want to join an incubator. There is meaningful engagement from the user group that is going to use their software. They can really drill down in to the business problems that are going to be solved or that they hope to solve. Um there is really understanding the law firm or the other business that they are going to be selling to; who holds the purse strings, who do they have to impress in order to get through the door. And you know, lastly it is a safe environment for them to test their product. They don’t have to be afraid that a mistake here or a mistake there will impact their sales cycle. Our programme is really intense. It is intense for a reason, we think that it drives interactions between the start-ups and our employees and that builds on long-term relationships. And so for me I think the collaboration between us and Geovation or start-ups is so important, it cannot be under estimated, it’s building product around really well understood business problems and I think it is really, really important that all of us if you’ve got the opportunity to launch an incubator or you want to, that you think about giving back to the start-up community and building the products and start-ups of the future and together, as Alex said, we’ve done a lot of work with a number of start-ups and we are going to do a quick one minute elevator pitch or attempt at it anyway for them over the next five or so minutes so Alex can start.
Alex Wrottesley
Head of Geovation
Ordnance Survey
Cool, so I think that is a really good point. Just to echo what Nick was saying about MDR Lab, we also find the same thing that if you want to work with start-ups and it incorporates the environment it is an amazing way to start to shift your cultural thinking of the organisation and I do believe that these small businesses are the ones who are challenging us daily as to what is the appropriate way to work.
Nick Kirby
PropTech Lead
Mishcon de Reya
Most definitely.
Alex Wrottesley
Head of Geovation
Ordnance Survey
They have no legacy. They’ve got no background thinking about what the right way of doing things, they are looking for the optimal ways to deliver now in the market so I think that’s why we have this real excitement about working with them. So we thought rather than talk about us we would talk about five businesses, very, very quickly as examples of what you can achieve when you work with us. So we are going to start off with one which, is there anyone from Land Insight in the room? No, not today.
Audience member
Yes one over there.
Alex Wrottesley
Head of Geovation
Ordnance Survey
Hello, one over the back, well done. So Land Insight you may know, they are one of the UK’s fastest growing Proptech companies. Um we've been working with them at Geovation since inception and they have also been supported by Pi Labs. It is a really good example of a business that actually took a while to get to get to where it needed to be. I mean there was a really challenging period, it is a sales driven business, driving to the market place and we were able to support Johnny, Andrew and the team at Land Insight with the environment not only to test with our data and they were early ordinate Survey data partners and Land Registry partners but actually give them the environment to grow and scale their business. They are now diversity champions, they are giving huge amounts back to the community um and they are a really good example of how just focussing relentlessly on customer experience, delivering excellent customer experience. We have spoken to several other potential customers and competitors and the people always say about Land Insight is they are so attentive to customer, that’s always been their driving value and I really think that’s helped a lot by just having the space to relentlessly focus on that over their first year. Orbital Witness.
Nick Kirby
PropTech Lead
Mishcon de Reya
So Orbital Witness are a Proptech meets legal tech start-up offering property professionals an assessment of legal risk associated with real estate and they are building their product at the moment um and they are moving beyond providing raw data to those property professionals and starting to use artificial intelligence and machine learning to extract and analyse information that sits on property registers to give meaningful insight to people at a much earlier stage in the transaction. To flag material issues much, much earlier on in the transaction so that it helps smooth the transaction process. And they have recently received a grant from Innovate UK for about half a million quid to focus on building that AI driven product, they are backed by some of the guys sitting just outside the door there, so JLA Spark, advised by Concrete VC, Life Ventures and Seed Camp, they are used by some of the leading law firms, obviously including Mishcon and they are also now starting to sell to other property professionals so they are used by M&S in their property team to start to understand their own retail assets. And I think it is a really great example of a collaboration between Geovation, Government, you know, using publically available data, satellite start-up, um scientists and subject matter expertise and Government funding to just build this really amazing product that could go, could go anywhere.
Alex Wrottesley
Head of Geovation
Ordnance Survey
Yeah awesome. The third act we’ve got is Urban Intelligence. Urban Intel were another company that came through our Geovation incubation platform. Err another example of business that takes time to get where it needs to go. So Dan Mohamed, who is the Founder has been on a journey the past 3, 4 years and he has got a point now where he has just launched a new product in the market place and it takes time to get there. What they are doing now is real time appraisal at scale, effectively taking public data, analysing that and being able to provide large scale property companies and property owners with immediate large scale appraisal value of the development potential for their portfolio. That’s not where they started, they started with a very GIS, Geographic Information Systems platform of here’s an app of all the planning environment. Very cool, you could see London’s entire planning supplementary guidelines in a visual way, overlay data but you realise quite quickly that actually that’s not going to be the solution you know, back to our talk earlier, you don’t want the drill, you want a hole in the wall and what Dan’s work has done is actually the hole in the wall is ‘I’m a big developer I want to know, give me the appraised value of my portfolio now’ and then track it over time. It is a good example again of working together over a period of time and he has worked very extensively with the Local Authority’s, with the Planning Authority’s you know, really drilling in to ‘why can I not get the data when I want it’ and as partners we have said we can really advocate on his behalf to make sure that we gave him the right to get the right data, particularly open data, into the right format for him to work with.
Nick Kirby
PropTech Lead
Mishcon de Reya
Okay so next is ThirdFort, they are a great example of a collaboration between us two. They went through MDR Lab at the same time they were in Geovation. They really drew on Geovation’s development expertise and they used their team to build their MVP throughout the whole of MDR Lab, so when it came to demo day they had this fantastic MVP that they could demo to everyone at demo day. And you know, they were building their MVP with the developers at Geovation at the same time as they were learning about how legal on boarding works, how legal payments work and so I just think that’s a sort of unique opportunity for some start-ups to start to do something like that. I mean so they are an FCA Regulated business and they are backed by Mishcon, Alex Chesterman from Zoopla. All the work that Geovation did means that Geovation are an option holder behind their other shareholders. Um they are, you know, they are about providing cutting edge tools to property professionals to do their on boarding in a completely new and streamlined way. So they use AI to take, to check that copies of passports are accurate and real. They use, they gather information from lots of other sources to check address data. They're using the new open banking rules to gather financial data about consumers and to present all of that information, the on boarding and the financial source of funds, to lawyers and other property professionals to give them a really great understanding of who their client is. And I think the important thing about it coming back to what we were originally talking about is that there is lots of friction in the transaction, the real estate transaction process and all of this including the stuff at ThirdFort is doing is providing consumers with a much better experience that the ones that they get currently and it allows them to streamline the process of on boarded by lawyers. And it saves countless hours of time for all the property professionals using this tool.
Alex Wrottesley
Head of Geovation
Ordnance Survey
So last up we’ve got a slightly a newer company so Hipla have been through Geovation and are now moving on to MDR Lab. So Hipla are trying to solve this challenge we have had for a long time which is how do we bring more information about buyers data into the process you know, the famous agent thing ‘buyers are liars’ is a phrase that Adam has used before now. And it is a really interesting dynamic, we know we are still in a vendor focussed environment rather than a buyer focussed environment and yet it is very strange that market dynamics still exists. So looking at you know, how can you improve buyer position, how can you evidenced where you are and more interesting you know, how can you create sort of pseudo reservation agreements around your position so you can again reduce that breakdown of trust in the chain. I’ve just transacted on a property the last month and a half. I spent six months going back and forth at all kinds of fun stuff but it puts you in an incredible place of stress when you are trying to transact and you have unfortunately a system not like in Scotland, where until we exchange contracts you are seriously exposed so the work that Adam is doing is really valuable in hopefully improving the markets, reducing friction in the marketplace and getting people to transact faster and more securely.
Nick Kirby
PropTech Lead
Mishcon de Reya
Yep.
Alex Wrottesley
Head of Geovation
Ordnance Survey
Conscious of time so we are going to crack on very quickly. Most importantly how… why, how we do this is to inform our stakeholders. Like the reason that MDR do it is to inform their legal colleagues of how they can be a better law firm and the key driver for Geovation is, how do we help John and his colleagues and my colleagues from Ordnance Survey deliver better outcomes. So John a little bit about Digital Street, about how this has informed your work.
John Abbott
Director of Data, Digital and Technology
HM Land Registry
Yeah so, so as the guys have described we work very closely with start-ups but we also work with a really broad community on a research and development project called Digital Street. So this is an open innovation project that invites anybody to be involved. It is completely free to join and you can chose to be an observer if you just want to come along and be part of the project and participate in a relatively passive way or you can get all the way in and start writing code and start building prototypes along with other folks from across the, across the industry. Our objective in getting and leading a research and development project is to make sure that we collectively understand um what the future for land and property buying and selling is going to look like so sort of timescale wise we are thinking 2030, maybe a bit sooner than that, late 20’s if you like. And um our kind of rational is the best thing to do is to invent the future rather than to kind of wait for it to come and grab hold of you. So all of the slides that we’ve talked about earlier on, Digital Street is an opportunity for us collectively as a market to go ahead and start to invent the future. It is really important that we start with user research so we start with needs um and as Alex was describing, buying and selling land and property in the UK, certainly in the residential sector is about as stressful as getting divorced so that feels like a nice big problem to solve. When we get everybody from across the industry together and we say ‘how well are we doing collectively’ we kind of say we kind of give ourselves a bit of a thumbs down if we are honest. We can’t really think of another industry that all gets together and has a conference and says ‘collectively we are not doing a good enough job’ but maybe the train companies probably have those sorts of difficult conferences but maybe they're alone. So yeah the other important bit is open innovation so everything that we do in Digital Street we publish, talk about openly, there is no kind of commercial in confidence, all the code is open source and if you are not already involved you are more than welcome to come and join us. One of the things that we’ve just done in the last month was look at the process of buying and selling houses and in particular the process of a residential property transaction and looking at how we can make that process more straight forward. So this diagram depicts that, so on the left hand side you see a better, richer set of information about a property um so kind of put in short everything you might want to know about a property but were afraid to ask so imagine a digital property record. Imagine that that digital property record is associated with the um owners identity and that identity is stored digitally, imagine that you can then transfer that property from one person to another um on top of a sort of automatically using a natively digital process, using something called Smart Contracts, imagine that you can automate the movement of funds so when I draw down my mortgage that it is automatically paid to the person that I bought the property from. Imagine that I can automatically have stamp duty paid and for us importantly, that the Land Registry can automatically be updated. So we’ll walk through that in just a second but before we do that I wanted to describe some of the partners that we worked with. Like I said there is 250 different organisations in Digital Street interacting with us to a greater or lesser extent depending on their preference but in the last month we went through and did a real life property transaction with some real life people and some real life companies so banks, Mishcon and so on, um so we took a property in Gillingham in Kent and we did an entirely digital transfer of it from a buyer to a seller. Um to show you that, so I will first of all show you the demo and then I will show you a picture of all the happy people that bought themselves a house in just a moment. So we are going to start off with the property records so this everything you want to know about the property. You can see that it is owned by a woman called Lisa and there’s a bunch of information about it. The seller’s solicitor now logs in to their system, so their own system um and the accesses the blockchain where that smart, sorry where that title is stored. They request that from Land Registry - I need to put this down because if I click it the video will stop so there is probably a danger that I do that – so the title has been transferred across to the solicitor with all of the information associated with the property, natively digitally inside their existing casework system. They are then going to ask, so they are selling the property, they are going to ask the bank to agree up front to discharging the mortgage. So the idea is that you do all this pre-prep work so that when it comes to exchanging and completing and things just happen sort of automatically through magic and technology. So Natwest log in to their system and they agree, they could automate this but in this case we are using a human to do it, they agree to discharge the property. So this is the demo version like I say, we did this for real and I will show you a picture of that I just a second. So you can see that’s being updated so everybody’s system is talking to a blockchain, so everyone is seeing the same version of the data at the same time so as the bank discharge or authorises the discharge, the seller’s conveyancer is able to see that on their system and then go ahead and configure their smart contract so they are configuring all the details of the, the um contract, they are doing that in sort of human readable English and that is then converted into executable code that you will see running in just a moment. That then goes across to Mishcon who are representing the buyer and Sam at Mishcon logs into their casework system. Again their casework system is tied into the same shared database, this blockchain that can see everything about the property as well. The person is buying it with a mortgage so they are going to add a new mortgage again kind of upfront into the process. Check their sales agreement that was sent to them by the buyer’s sorry the seller’s conveyancer. They are going to agree with that so presumably they could, they might disagree and we have built in the opportunity for people to negotiate around the contract but in this more straight forward example this is, we haven’t included it. The seller then gets a text message and they log in and verify themselves so first of all they do some sort of light registration to verify themselves with an identity provider called Yoti and um that allows them to go ahead and see their contract, put their pin number in, or see the agreement I should say. So they can click through that, review that, check the boxes and then go ahead and sign it. So when they come to sign it so they use their pin number to see the data but when they come to sign it they need to do a greater level of authentication so we ask them to go ahead and do a, take a selfie video, so we are checking that Lauren’s face is the same face that was checked against her passport when she first signed up for Yoti and we are also checking that she is alive and that somebody is not buying a house in her name after she has died. And hey presto, so she’s gone ahead and signed her contract to buy a house. The same contract, sorry Lauren was the seller, I beg your pardon. The same contract goes to the buyer who again follows the same process. So they use their pin number, so relatively light authentication to see the contract. Review it, know it, they know that it is sent to them and has already been reviewed by their solicitor so sort of their expert advisor if you like. Click continue, and here they are not just signing the contract but they are also agreeing to things like paying their stamp duty, signing up to a new mortgage, setting themselves up for 30 years’ worth of pain and misery perhaps [Laughter from audience] but we don’t know and then they go ahead and do the same thing. So take a selfie diagram, take a selfie picture to go ahead and sign their, all of their documents. So that’s neat. So it is quite cool that you can sign a contract using your… taking a selfie video. We think that’s certainly easier, certainly more secure than the current process but what is really neat is that those contracts, like I mentioned earlier on they are all natively digital and they’ve got code written inside them and that code will automatically execute now they have been signed in this case, on completion day so on completion day everything just kind of happens by magic; so the new mortgage is drawn down, the old mortgage is paid off, the funds are transferred, any remaining funds are transferred where they need to. The stamp duty is paid and so on and so forth. Just automatically, no faxes, no hassles, no phone calls, no bank charges, etcetera and then finally the Register is updated and you can see just in this last picture that the property has been updated and David Jones the new buyer is the person that now owns the property. So that was the demo that we did that kind of sort of fake data if you like but we went ahead and did that for real so these are some folks from Land Registry, some folks from Yoti, the solicitors, the buyer, the seller and we were in, people were doing this… was it the buyer or seller that was in Spain? So Yoti were in Spain, the buyer was somewhere, the seller was somewhere else, we were all over the place but transacting on a property all at the same time. We didn’t all have to jump on a video conference to do that but we just wanted to do it because it was the first time we had ever done it and so it was a really straight forward process and the seller loved it so it was a far more straight forward process than the one that he was used to or had gone through previously. So in summary what we are talking about here is how you go ahead and collaborate with a market. It is really important for us at least as organisations that we interact with start-ups because they are right at the edge of innovation looking to solve problems in new and exciting ways with, as Alex says, with fresh thinking, without the legacy or particular business model that perhaps some of us that have been around for a little bit longer might have. We think it is really important that that collaboration focusses around known problems so things that are as painful as getting divorced are good, big known problems and so if you are interested in working with us on some of those challenges either learning a bit more about how we work with start-ups or joining the Digital Street community or both, then go and spend… come and a conversation with us afterwards or we’ve also got a stand in the middle of the floor that’s big and orange and says Geovation on it so you probably can’t miss it so go and have a conversation there and you will probably get a better demo than the one that I’ve just done as well if you want to. Thanks very much that was us just talking to you guys about open collaboration.
Alex Wrottesley
Head of Geovation
Ordnance Survey
Thank you.
Nick Kirby
PropTech Lead
Mishcon de Reya
Thank you.
[Applauds from audience]