Yesterday Instant Property Network (IPN) announced the completion of a test for a blockchain property transaction system that connects all parties in a real estate transaction. The project has the lofty aim of making property transactions as simple as buying an item from Amazon. It claims that there’s potential for $160 billion in savings to be made globally through efficiencies.
The test involved connecting all the parties in simulated transactions with the first transaction taking less than an hour to complete. The group acknowledges that there are other processes which take place outside the ledger. Hence it estimates the average deal time could be reduced from three months to three weeks.
Currently, a property transaction involves significant back and forth of emails with numerous documents and is very inefficient. IPN aims to join up the business processes of all the different parties and transact directly. Each party retains control over its own data.
“What has made a real difference here is that R3 has brought representatives of all the key parties involved in the process together, so as a result we can see the potential for a network of this kind to improve transparency and speed for customers, and reduce cost and complexity for all involved,” said Dan Salmons, Director for Mortgage Innovation at RBS.
The purpose is to share data between the buyer and seller, their agents, conveyancers, banks, insurance companies, land registries and tax offices.
“The future of the industry is for all to operate across a common platform, and benefit from significant gains to efficiency and transparency,” said Matt Taylor, Head of UK PropTech at Clifford Chance. “Instant Property Network not only offers the upsides of high connectivity with transaction participants, it also maintains tight control of data that is shared on the platform – a strong proposition in the industry.”
Forty organizations took part including Barclays and RBS, lawyers Squire Paton Boggs, Ashurst and Clifford Chance, and real estate data company Acumen.
Last year HM Land Registry selected public sector focused software company Methods to use R3’s enterprise blockchain technology for DLT research and development for its Digital Street project. Methods worked with Blockchain Digital and Persistent Systems the two developers involved in the Instant Property Network. Blockchain Digital Services changed its name to IPN Group Limited yesterday.
Earlier this week UK insurer Aviva invested in another blockchain property company, Acre Software, which aims to streamline the mortgage process.