NatWest Sets Up DLT Consortium to Make Life Easier for Home Buyers
NatWest, one of the largest commercial banks in the United Kingdom, is in the process of getting a group software companies to help develop a platform that enables home buyers to go through the entire process from the comfort of their mobile phone. According to Finextra, 7 different software companies, including Coadjute and Redbrick Solutions, will be a part of the consortium, each bringing a different dimension of tech expertise for the platform, November 29, 2019
Distributed Ledgers as a Coorindation Layer
Real estate has been majorly disrupted by the advent of distributed technology. From tokenization of the property itself to making the lengthy process less cumbersome from buyers and sellers, there is a healthy amount of rapid innovation – enough to deem it one of the most disrupted sectors by blockchain and distributed tech.
NatWest brings a wealth of customer service and banking expertise to the table, and this will serve as the heart of the platform, potentially attracting a number of buyers and sellers. The rest of the consortium will help build the core software and distributed ledger to coordinate the activities of the various stakeholders involved in the process.
Traditionally, buying and selling real estate starts with finding a counterparty and agreeing on terms, and ends at a minimum of a few months later with an escrow transfer of the property deed to the buyer and the full sale amount to the seller. This involves a lot of running up and down from one place to another, and the sheer amount of paperwork just adds to the hassle.
By acting as the base layer for coordination, a distributed ledger could help keep all stakeholders in the loop while providing a platform to conduct everything from a mobile phone app. This could potentially revolutionize the process of buying and selling a property.
Tokenization Can Boost Real Estate Valuations
Today, millennials are strapped for cash and have very low average net worths when compared to Gen X and Baby Boomers. Real Estate Investment Trusts (REIT) already exist and offer retail investors exposure to a mix of commercial and retail properties selected by the trustee.
Tokenizing individual houses increases the scope of real estate divisibility and offers more specific exposure to the real estate market. For example, with RealT, one can purchase units in a particular house in Detroit, and the team is in the process of expanding this across the United States.