CEO and co-Founder of the TPX™ Property Exchanges, Antony Abell, unpacks how the evolution in property ownership is now reigniting real hope and promising greater financial security for the many, not the few, in the new inflation-resistant, asset based, global, sharing economy.
This year, inflation has continued its destructive war path through a global economy currently in the midst of uncertainty, political and market disruption, and severe currency fluctuations. People are feeling increasingly trapped without the liquidity and mortgage options they need, and their ongoing desire for greater financial stability in the property market currently going unfulfilled.
The market turmoil is hitting consumers and businesses alike, as the Financial Conduct Authority (FCA) estimates that 7.8 million people in the UK are now finding monthly bills a “heavy burden”. Inflation has also hit a 40-year high. However, there are alternatives entering the global marketplace sparking a cause for real hope for long suffering consumers and concerned property owners. A global real estate market with $326 trillion in wealth houses an untapped reservoir of inflation-resistant assets ready to be monetized through a secure and regulated property ecosystem.
The old adage of “safe as houses” during economic downturns rings as true today as it has with generations past. Property exchanges are now starting to bring a market of over 6 billion global smartphone users directly to properties on local exchanges without middlemen or banks.
The Future of Assets
The words ‘property’ and ‘investment’ have come to inhabit an almost symbiotic relationship in the 21st century. Images of estate agents buying and selling houses and negotiating shared ownership deals have permeated the world’s imagination through film and television for over 70 years.
However, the concept of property as a fully liquid asset available to all, rather than an investment sold off through shares or debt in private deals, has been an undeveloped idea, until now.
Historically, estate agents had two methods of transacting properties, either buying or selling, or by the renting to tenants. Through new property exchanges, a third way has now been created whereby legally recognised, small unit property titles can be converted directly into inflation-resistant assets that are now capable of being used in common day to day card transactions. Inflation-resistant property can be used as inflation-resistant money itself without the time delays incurred through traditional methods.
The Dawn of the Property Exchanges
Instead of an offering to the relative few, the property exchange processes enables a democratisation of the acquisition of property assets for individuals worldwide. Access to global liquidity can now enable a family, student, or high net worth individual the equality of opportunity to step on to the housing market ladder. Now, they can share in the inflation-resistant aspects of property that had, due the traditional deposits required, been otherwise unobtainable to them.
Cutting out the commissions, fees, debt obligations and costs associated with taking your property through the traditional selling process can also provide a viable ‘part sale’ alternative to equity release or re-mortgage products for a society struggling with cost-of-living increases and a potential housing crash.
The housing crisis of 2008 hit global markets and homeowners like never before, displacing nearly 10 million Americans, and decreasing the average UK house price by 20 per cent in just 16 months. The advent of decentralised exchanges enables properties, once listed on an exchange, to enhance their value as they become ‘live’ assets without hypothecation, bailment, leverage or liability. Homeowners will now have visibility of the market value of their properties on a minute-by-minute basis, solving the transparency, leverage and governance issues responsible for the subprime mortgage crisis of 2008.
Belt and Braces
Property forms the basis of a substantial portion of global wealth, but with any form of asset trading, the most important factor in retaining the trust of any community or marketplace is the safety of the assets that are used. Equally, property is usually the largest single asset that any one person may own in their lives. Through military grade encryption, careful design, complete transparency, and rules based governance the property titles can be securely exchanged in a highly secure and regulated environment.
The London housing market alone is home to over 3.6 million residential properties and the UK has an estimated 2.7 million private property investors. Overseas owners of London residential properties own 85,451 properties in London with a value of over £45.3 billion. Through listing each square foot of a property on a local exchange, foreign owners can now avoid the fiat currency fluctuations that increase the risk to their portfolios. Property owners can now go directly to the global marketplace to realise the value of their properties and avoid the inflated fees, commissions, costs and time delays associated with banks.
An individuals’ primary asset is their property, and by releasing it from the shackles of an inefficient and cumbersome system, individuals with either £10 or £10 million of property can now have instant access to global inflation-resistant liquidity at the tip of their fingers.
Residential properties in London:
Number of UK private property investors (Dec 2020): https://www.buyassociation.co.uk/2020/12/18/the-number-of-buy-to-let-landlords-reaches-an-all-time-high/
Overseas property owners in London (July 2022):