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Fintech firm reveals it values properties based on sewer cocaine level data

Founder of Savills-based Proportunity reveals extraordinary fact during presentation to fellow tech start-up entrepreneurs in London.

Nigel Lewis

An innovative proptech mortgage company backed by Savills has said it uses drug usage statistics gleaned from sewer monitoring to value homes prior to making loan offers.

The extraordinary claim was made by Proportunity CEO and cofounder Vadim Toader at a Google Campus gathering in London’s Old Street tech neighbourhood this week.

While explaining to a crowded room of fellow tech start-up entrepreneurs how his company values properties, he revealed that Proportunity’s data scientists use reports from official measurements of chemical compounds in sewers to determine levels of local drug use and therefore measure an area’s economic development.

Attendees were shocked to hear that gentrification of a postcode can be measured by a reduction in crack cocaine residue present in local sewers.

Fintech valuation

Toader said that this was one of 100 indicators the company uses to measure a property’s likely future value alongside more traditional measurements such as whether fashionable retailers had opened in an area, levels of unemployment, Ofsted school ratings, levels of crime, property size and number of bedrooms.

This information is used by Proportunity alongside machine learning techniques to pinpoint hidden property bargains for sale on the market and then offer loans to first time buyers based on predicted future value.

The fintech firm, which was founded in 2016 by Toader and Stefan Boronea, is an FCA-approved mortgage lender and that only operates in London.

But in many ways it is similar to the government’s Help to Buy equity scheme. Proportunity take a 15% equity in each property which is repayable after five years and offers borrowers interest-only loans as well as under-priced homes to buy.

October 5, 2018

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