Australia-UK FTA helps Australian proptech PEXA simplify the UK property market
PEXA’s core principle, says Group Chief Executive, Glenn King, is ‘to connect people with place.’
In the Australian property market, PEXA is achieving its purpose. Its world-first digital settlement solution brings together all elements of property exchange into a state-of-the-art platform.
Because the UK and Australian property markets are structurally similar, the Australian proptech chose to test its international footprint in the UK in 2020.
The Australia-UK Free Trade Agreement (A-UKFTA) is set to provide further benefits as PEXA grows in the UK. The expansion of mobility provisions in particular is expected to help PEXA continue to scale in the market.
Market similarities prompt UK expansion
Andrew Lloyd, PEXA’s Chief Customer Officer in the UK, says the similarities between the markets in the UK and Australia were key to PEXA’s decision to enter the UK market.
“Each market operates under a similar, albeit different, regulatory and legal regime,” he said. “There are a small number of large lenders shaping the market. In Australia, there are 4 major lenders and some larger second-tier ones. In the UK, there’s the Big Five.
“In addition, the pain points in the process are similar. From our research in the UK market, there is currently customer detriment experienced in over 80% of property transactions. Transactions now take close to 6 months. This is similar to how the market used to operate in Australia.
“We bring the highly fragmented data associated with property transactions – that includes lenders, lawyers and conveyancers, brokers and borrowers – into a single combined workspace. We believe this is the best way to deliver efficient and streamlined customer service. It also meets the expectations of regulators, and GDPR (General Data Protection Regulation), CDR (Consumer Data Right) and privacy requirements.”
PEXA entered the UK market in 2020. The company launched PEXA Pay with the Bank of England to provide settlement services in March 2022. It also acquired Optima Legal, the high-volume UK conveyancing firm.
PEXA’s UK transactional business celebrated its first customers in September of that year. Since then, PEXA has partnered with the UK’s ClearBank, signed up UK personal, business and real estate investment bank Shawbrook and the long-established UK building society Hinckley Rugby Building Society.
“Our UK market strategy was to start small and scale,” said Lloyd. “To date, the reception we are getting from lenders, law firms and conveyancers is very encouraging.”
PEXA continues to update its platform to take advantage of new technologies and deliver new capabilities. Today the platform is API-enabled to ensure it is future-proofed and fully exportable to new markets such as Canada and New Zealand.
The value of the A-UKFTA
Lloyd is excited about the value the Australia-UK Free Trade Agreement (A-UKFTA) will bring to PEXA. “It will primarily be a ‘halo effect’ for us through the keen interest the agreement is generating in both markets,” he said.
Australia’s burgeoning superannuation firms currently manage more than A$3.4 trillion worth of funds, a sum that is expected to grow to A$9trillion by 2041. These firms are now also focusing on the UK property market.
Another value of the A-UKFTA will be the free flow of professionals between both nations. Sagra Clorio-Jessel, Senior Business Development Manager for Health and Fintech at Austrade UK said, “This will enable experts from both countries to share and exchange their skills and experience more easily.”
Real-time property exchange platform used by over 20,000 Australian families a week
Simplification was the key motivation of the group that founded PEXA. The founding group looked at the best way to digitise property transactions in Australia.
This focus on digitising the pain points of transactions has been the key to PEXA’s success in Australia. The company provides quicker access to the proceeds of a sale and near real-time tracking on property settlements.
PEXA attracted significant investment from inauguration in 2012. The company listed on the Australian Securities Exchange (ASX) in mid-2021. PEXA’s network of financial institutions, legal and conveyancing firms currently helps over 20,000 Australian families a week to settle their homes.