“I see the Lettings Sector Reaching a Tipping Point Imminently.”
This is a guest article written by James Davis and first appeared in our collaborative e-book “The Future of Property,” which features 17 thought leadership articles covering PropTech, property investment and housing. You can download your free copy here.
James Davis is CEO and Founder of Upad, the UK’s largest online letting agent and winner of Best Online Agent at the ESTAS 2017. James also won Start-Up Entrepreneur of the Year at the Barclays Entrepreneur Awards 2017. Here he explains how technology is disrupting the property industry and how landlords need to change their approach.
“I see the lettings sector reaching a tipping point imminently.”
Everything we do in our daily lives - from grocery shopping to car insurance, is now driven by technology. With industry giants like Amazon dominating their markets with innovative technology solutions that feed our desire to get what we want as soon as possible, there’s a turning tide in the property industry for technology-driven solutions.
PropTech is the new buzzword to describe the collision of property and technology - we’re no longer looking to buy, sell, rent or let property using outdated methods such as an advert in the local paper or by word of mouth.
Here are some home truths, which suggest lettings will move from bricks to clicks:
- 92% of tenants start their search online
- 56% do so on mobile devices (up 3x over the past 12 months)
- 39% of tenants enquire outside of normal office hours
Of the 150k properties coming onto the rental market every month (and rising), more landlords now choose not to employ a high-street agent, and would rather use online agents or similar businesses.
“Lettings will move from bricks to clicks.”
Tenants, particularly those under 30 years old (who are the largest demographic in the market), are searching online for their next home, not in agent’s shop windows. This shift not only paves the way for online agents, like Upad, it also means landlords need to become technology-savvy and up their game. As much as the Yellow Pages is a thing of the past, traditional lettings services will soon be too, as landlords turn to more manageable and cost-effective solutions for promoting their rental properties.
“Those offering superior customer service will drive change and win new business – across many sectors, not just in lettings.”
However, the lettings market is not an ecommerce platform at large. This is something that other online agents and PropTech companies get wrong- by offering a self-serve platform built by developers and coders, it will only gain traction with a small pool of early adopter customers. Those offering superior customer service will drive change and win new business – across many sectors, not just in lettings. We all want stuff now. We don’t want to wait several days when ordering something online. We expect an answer when submitting a question online through live chat or email. We expect businesses to be open 24/7. We expect businesses to have a customer care team who understand what they are selling. PropTech companies who don’t offer this are unlikely to ever become true disrupters - the key is customer service, empowerment and knowledge to go hand-in-hand with technology.
Most landlords need educating or empowering - as they are either fairly new to buy-to-let (over half have been a landlord for less than 5 years), or operating as such in their spare time – and this leads into the need to offer superior customer service and support, which are key to succeeding. Landlords need trusted guidance, and they need to be aware of potential pitfalls and how to get the most out of their rental business. Getting a property onto Rightmove & Zoopla is an important part, but only a small part of what is needed to let a property.
Particularly, tenancy agreements are a minefield for landlords. Requests of what customers want adding in and previous versions that are sent across from their previous high street agent, is an eye-watering area of concern; frequently they are outdated, un-enforceable - or both! Then there’s the raft of legislation that landlords must follow- if a landlord doesn’t protect a deposit they could face a hefty fine and failing to provide certain documentation such as the EPC and Gas Safety Certificate will prevent a landlord from serving a Section 21 notice.
“Success is now driven by how much that property stands out online – and that it doesn’t succumb to the ‘swipe effect’ when tenants scroll through property listings on their mobile device.”
Landlords also need to consider that when advertising online, it’s less about the rental price now. Since starting in 2000, Rightmove has claimed an astonishing 77% share of the fast-growing online property portal market. Much like how organisations now adjust their online strategies to the tune of Google’s algorithms, landlords should now begin adjusting their approach to be more effective on Rightmove. Success is now driven by how much that property stands out online – and that it doesn’t succumb to the ‘swipe effect’ when tenants scroll through property listings on their mobile device.
“It’s imperative to empower landlords to self-serve and educate them on how to be digital property marketing gurus.”
In a recent survey, 91% of tenants would place photography as the single most important part of an online listing. You could be advertising a stately home in the Hanging Gardens of Babylon, but without well-composed photography it won’t get the attention it deserves. When posting shots of your property, it is important to paint the fullest possible picture of the space. Online users want all the information and they want it quick. Provide different aspects, including key features, exits and views. Don’t go ahead with the shoot if it is dark - natural light is something renters will be attracted to. And make sure the property is clean and presentable – dressing the beds but removing personal belongings will make it look homely but not lived in.
It’s imperative to empower landlords to self-serve and educate them on how to be digital property marketing gurus. Throughout Upad, we have put the customer at the heart of all of our operations – with a ‘new model’ which is completely customer-focused but also innovative in its technology solutions. The high street is only surviving with its current market share because of customer inertia - landlords should be doing due diligence on their agents. Lettings is an increasing dynamic like many other areas of life – we should be rating our existing marketing channel or agent by their response times, servicing levels, their digital marketing skills and fees, for example - just as we do with insurance, utilities and mobile phones. I see the lettings sector reaching a tipping point imminently, where PropTech will take root from its green shoots at present.
- Written by James Davis
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