Skip to main content

Artificial intelligence (AI) may not lay bricks, install light fixtures, or carry your couch up the stairs, but it is orchestrating a transformative revolution in the way we shape our built environment. The real estate and construction sectors in the UK are on the brink of a profound transformation, one that will address longstanding inefficiencies and propel the industry into a new era of productivity and sustainability.

The Lopsided Reality

The world of proptech has experienced rapid advancements in recent years. Companies like Trulia, Zillow, and LoopNet have empowered consumers to take control of their property searches. Property management and brokerage activities have been streamlined with the advent of Software as a Service (SaaS) platforms like RealPage and AppFolio. New pathways to home ownership have emerged, making the process more accessible than ever.

Yet, amid this progress, critical aspects of the real estate and construction sector have lagged behind. Construction, in particular, has been resistant to digital transformation. Mega-projects routinely run significantly behind schedule, with cost overruns plaguing 98 percent of all ventures. Astonishingly, inefficiencies in construction lead to an annual loss of £1.2 trillion in value.

Consider this paradox: You can complete much of your property search and financing online, seamlessly and efficiently. However, a single hiccup in the construction process, such as overbooked equipment, a minor design flaw, inclement weather, or a lack of skilled labour, can cause months of delay. This bottleneck effect stems from the interconnected nature of the industry, which revolves around the creation of the buildings we inhabit and the infrastructure that supports them.

The reluctance to embrace technology in the “back-end” of real estate processes, combined with substantial capital requirements and complex regulatory structures, has hindered digitisation efforts. But AI is poised to change the status quo, offering a solution to these long-standing challenges.

AI: Bridging the Gap

AI, powered by data, is set to become the foundational layer that unlocks efficiency and speed across the real estate production chain. With its potential to streamline numerous processes, AI has the capacity to trigger a cascading effect that closes the productivity gap, yielding a more efficient ecosystem.

A Productivity Cascade

Imagine the real estate industry as a chain, with each link representing a distinct stage of the property development process. This highly interconnected network relies on specialised expertise at each link. However, inefficiencies within one link can easily cascade to the next, resulting in significant delays.

For instance, it can take two to four months to complete the planning and permitting process alone. Selecting a lot may take one to four weeks, choosing a designer two weeks, and solidifying plans several months. These are just precursors to selecting a contractor, and the list goes on. Even for a single-family house, the timeline is lengthy.

This is where AI-driven startups can seize opportunities. Each link in this chain can be optimised with AI, creating a productivity cascade across the entire spectrum.

Optimising Individual Links: AI can revolutionise specific links by significantly improving processes and reducing errors. Large datasets, encompassing blueprints, zoning laws, emissions data, and more, are ripe for AI disruption. Initially, AI will serve as a co-pilot, but as trust in the technology grows, it will transition to an autopilot, working with architects on pre-construction, permitting, environmental impact assessments, and more.

Bundling Tasks Together: Firms will be able to bundle tasks that once required entire teams or companies. AI-driven software will enhance labour productivity and improve the cost-efficiency of materials.

Streamlined Handoffs: Task management within the real estate production chain will become dynamic and streamlined. Companies will be better equipped to manage necessary handoffs at the right time.

Foundation for Digitisation: AI will enable the digitisation of property management, further enhancing operating efficiency. These digital tools, equipped with physical sensing technologies, will contribute to reduced emissions and operating costs, completing the streamlining of the building life cycle.

The result will be AI-powered real estate and proptech platforms capable of handling many aspects of the property development process under one roof. This consolidation will lead to fewer errors, improved results, the closing of the productivity gap, and enhanced operational efficiency. The impact of AI in real estate will mirror the transformations seen in software, eventually extending into manual tasks associated with real estate, including construction, material logistics, and maintenance, all facilitated by sensing technologies and robotics.

AI x Real Estate: Examples in Action

Here are a few examples of how AI is driving innovation in the real estate sector:

AI-Optimised Design, Permitting, Environmental Impact, and Architecture: AI excels in pattern recognition and optimisation when trained on high-quality datasets. It can significantly speed up the permitting process, particularly in fields like zoning and architecture, where complexity abounds. AI is also contributing to efforts to reduce the environmental impact of buildings through architectural optimisation.

Digital Twins: Digital twin technologies are allowing the integration of disparate datasets into living replicas, enabling the optimisation of every aspect of the construction and operation chain.

Subscribe in a reader

Connect with us: Facebook – Inspire Legal Group Twitter – @InspireLegal_ Instagram – inspirelegalgroup LinkedIn – Inspire Legal Group

Visit our website: