The property rental market is still dominated by private landlords whose property portfolios might only include a single or a small number of properties. With the potential drop in returns and the increased cost of rental, such as the expense of complying with local authority requirements, means that many of these landlords are looking to reduce other costs. Letting agencies are coming under increased pressure to provide a more cost-effective and efficient service. Add to this the fact that there are likely to be more letting agencies competing against each other and potentially fewer rental properties, and it becomes clear that letting agents are operating in an increasingly competitive market.
Any letting agency needs to offer an excellent level of service at a competitive price. Letting agency fees are under downward pressure from the market conditions and the increasingly competitive environment. Those that change successfully will survive while others will not. Thus, letting agents are looking for innovative solutions to allow them to offer the same or a better level of service to landlords whilst still reducing costs.
Advertising property goes online
One of the first innovations that letting agents embraced was the move to advertising property online. This has led to the rise of property listing portals that show property to let from a number of different letting agents. These searchable platforms make it easier for tenants to find a property that suits them. This gave a competitive advantage to letting agencies that first embraced online advertising, but soon nearly all letting agents were advertising their properties through these portals and the advantage it offered was negated. Online advertising has now become a standard expense for many agencies, offset to an extent by reductions in other advertising costs, for example, advertising in local newspapers. This has also benefitted the landlord vastly, as they can find everything in one place, not only searching for tenants but also looking for mortgages from the likes of Altrua Financial and other reputable companies, as well as other required property services. Newspaper circulation has reduced and, therefore, advertising costs in this regard have vastly reduced. If we consider flats and homes for let, we find that the vast majority appear on at least one of the big property portals while fewer and fewer are advertised in the local papers. This means that potential tenants now search for places to let online first instead of visiting local letting agencies. They are not, at least initially, concerned by what agency is offering the letting service.
Further developments demonstrated
Letting agents were among the first to innovate further by developing their online presence greater than just as an advertising platform. They looked at what other services could be offered online to attract potential tenants and landlords to their sites. One area that was identified and rapidly developed was the potential to offer online bookings for viewings. This meant that if a potential tenant identified a property on one of the large property portals they were interested in, they could be directed straight to the lettings company website to book a viewing. The advantage for the company was that they ‘captured’ the potential tenant before other companies who might also be offering the same property for rent. Following this, agents started to develop other services such as collection of tenant references and statements of rental payments to landlords. These services have been adopted across the capital and are particularly popular when dealing with short-term let properties. They have the advantage of speed and convenience for both the landlord and potential tenant. All parties involved in short let properties have welcomed these innovations, which have considerably speeded up the process.
Innovations welcomed by those involved in short-term rentals/lets
A phone, postal, or paper-based system could take weeks or months to complete and this meant getting a tenancy agreement negotiated and issued was not a quick process. This was a particular problem for those involved in short term lets, where the legal side of the process was perceived as holding the market back. Indeed, on occasions, the process of agreeing on a tenancy could take longer than the tenancy term itself. Many agencies have continued to develop online processes especially to speed up the pace of setting up short term lets. It is now possible for potential tenants to be pre-screened and reference checked via online submission, and for landlords to check on the future bookings of their short let accommodation online. One area of this market that is growing well is the renting of short let apartments. This appears to be linked to the increased trend to offer professional specialists short-term contracts to work on specific projects. For these people looking for short let apartments, they need to complete the process online, as they are often not in the country yet.
As you can see, there have been many different innovations that have been made in the world of property lets. This is something that has been welcomed by most in the industry, as a lot of people thought it was lagging behind. However, this no longer the case, as the Internet has opened up a wealth of possibilities and opportunities for both the landlord and the seller.
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