Written by Ilya Drozdov, Dwelly
The UK property market is currently at a crossroads. With a heavy reliance on outdated business models, particularly within the rental and partial sales sectors, many agencies are failing to meet the rising expectations of modern customers and struggling to adapt to the rapidly evolving digital landscape.
As someone with deep experience in this space, I firmly believe that if the industry is to thrive and remain competitive in the coming years, it must shed its traditional approaches and embrace technology. If agency owners and investors do not act now, they risk being left behind.
Property agencies in the UK are operating in a highly fragmented market. The vast majority of players in this field remain committed to the status quo — a model built on manual labour, personal relationships, and an overwhelming dependence on outdated practices.
Even though some of these companies boast annual revenues of £100-150 million, they still only represent a small portion of the total market share. For context, the largest agency in the UK holds less than 2% of the market.
The problem is that many of these agencies have been slow to adopt new ways of working. While customer expectations evolve towards seamless tech-driven experiences, traditional agencies remain wedded to processes that are no longer adequate to meet the demands of the modern market. In today’s market, consumers expect a stable, predictable service that ensures safety, transparency, and efficiency at every step of the way.
Personal relationships and human interaction are still valuable, but they are no longer the only things that matter in a property transaction. The increasing adoption of technologies like artificial intelligence (AI) and language models means that many of the roles that agents once played — acting as intermediaries — are now becoming redundant and increasingly automated.
The challenges of introducing new technologies
For many traditional property agencies, embracing new technologies feels like an insurmountable hurdle. Agency owners face several key challenges, one of the most significant being a mindset shift that involves letting go of the fears surrounding technological evolution.
Think about it, the majority of property agents have a background steeped in old-fashioned practices. Many owners have spent decades building businesses based on personal networks and the reputation of their services. Changing their mindset to incorporate technology feels like a threat to the very essence of their business and to what once made them great.
Another significant feat is a lack of technical expertise. While these agency owners are experts in the property market, they often lack the skills necessary to evaluate, implement, and manage complex technologies. The learning curve is steep, making resistance more palpable.
Additionally, the cost of implementing technology remains a significant obstacle. Property agencies, especially smaller players, often view technology as a risky investment. Without clear, immediate returns, owners hesitate to commit large sums of money to tech-driven transformations.
The result is a sector that remains stuck in the past, unable to meet the changing demands of the market or respond effectively to the competitive threat posed by larger, tech-driven companies.
How to overcome these challenges
There is a way forward. To begin with, the good news is that the industry does not have to navigate this transformation alone. A key strategy for embracing technological change is through partnerships. Smaller agencies should consider working with tech companies or larger agencies that already have the infrastructure in place.
Partnerships enable small agencies to access cutting-edge technologies and benefit from the operational efficiencies they generate without the financial burden of investing in them directly. This type of consolidation is already happening across the globe, with larger agencies acquiring smaller competitors in order to integrate modern technologies into their existing operations.
As the market consolidates, agencies must prioritise automating their back-office. Tasks like property listings, legal documentation, and administrative work can be easily managed by AI and machine learning platforms. Not only does this significantly reduce operational costs, but it also frees up human resources to focus on more strategic, client-facing activities.
Quinto Andar in Brazil and Beike in China are prime examples of tech-enabled property companies that have successfully leveraged automation and offer a blueprint for the future of the industry.
How investors can help drive change
As more agencies begin to recognise the importance of technology adoption, this part of the property sector will increasingly become an attractive asset class for institutional investors. The shift to a tech-enabled business model will provide greater security and scalability — two characteristics that institutional investors value highly.
In fact, tech-enabled property businesses present a golden opportunity for investors who are looking to move away from the inefficiencies of traditional business models. Agencies that invest in technology will become more efficient and competitive, and investors who back these businesses will see greater returns.
Furthermore, platforms that provide “end-to-end” services will allow retail investors to enter the property market with smaller capital amounts. This will lead to greater liquidity and transparency in the sector. For investors, this shift means that they will no longer need to be directly involved in property management but can instead rely on technology to assist.
Final thoughts
The property industry in the UK is at a critical juncture. Traditional agencies must overcome their resistance to change and embrace new technologies. Those who do will benefit from greater operational efficiency, improved customer experiences, and a more attractive position for investors. The future of the property market is tech-driven, and agencies must evolve or risk being left behind. It’s time for all players — agency owners, investors, and advisors — to recognise the urgency of this transformation and act before the opportunity slips away.
