As the interest in digitisation grows, we hear more and more about cryptocurrencies and, more recently, NFTs. These non-fungible tokens, which some would say are the digital version of some unique collectable, are spreading everywhere. Still, surely, they can’t be spreading into the property market, can they?
It’s an interesting concept which may seem a little unfathomable, but you need to consider how much things have changed in the area of the NFT. In music, several huge names in the industry have taken to the token to offer limited items like lifetime gig tickets and giving early access to their latest album. Many people clamour to get their hands on them, which drives up the price; as the BBC noted Kings of Leon sold their NFTs for around £1.4million.
Another area NFTs have found their way into the mainstream is by supporting your sports team. Socios fan tokens are available for a host of different clubs in London, the U.K. and across Europe. They allow a supporter to get closer to their teams by gaining access to owner exclusive polls to have their say on things like what motto should be on the dressing room wall or the message that should be displayed on the captain’s armband. Both of these demonstrate how the NFT has moved simply beyond being a certificate of ownership for a piece of digital art, like one sold at Sotheby’s for $11.8million (£8.8m) earlier in 2021.
With so many other areas of industry being disrupted by this digitised ownership model, it has to be only a matter of time before we see them introduced into the world of real estate in the U.K. After all, if musicians can use it to provide ownership of their assets, why not property?
Investing in a part-ownership of a property to gain revenue isn’t something new, so how about considering doing it via the tokens on the blockchain? If you’re a homeowner, it could work in your favour too. For the investor putting in their funds, they would receive the tokens and then receive a rental income for doing so. With the booming market across London right now, with places like Bayswater and Maida Vale seeing huge rises in rental income, it could present the perfect investment. Should the property be sold; owners would split the profit upon capital appreciation.
Not only would it be something that could be facilitated for the experienced investor, but it could also be an easy way of opening up the world of investing into a property for a whole new generation of people, who maybe thought it was out of reach. It could also potentially open doors for those who need to unlock equity in their homes without borrowing money from a financial institution or even moving. The owners of tokens in property could also trade them securely via the NFT markets, meaning they could potentially profit from their investment. There are so many options that could become available in the near future.
The Land Registry in the U.K. has already been looking at the possibility of ownership via NFTs, and they found that introducing the token system could drastically reduce the time it takes to purchase a property. The current transfer of property ownership is labour intensive and expensive, with reams of paperwork being printed and distributed. But if these documents were to be tokenised, they could be distributed within minutes, and more importantly, significantly speed up the whole process.
While NFTs are yet to be introduced to the physical property market, their bleeding into so many other facets of industry shows that there is potential for them to be much more than the digital collectables that many people only saw them as.