Earlier this year the UK government introduced the Tenant Fees Act, banning landlords from charging renters hundreds of pounds in administration fees for tenancies signed after 1 June, 2019. The move is the government’s attempt to make the rental market more affordable and fairer for tenants who’ve faced the prospect of having to scrape together thousands of pounds to simply move home. While it’s unlikely you’d disagree with the aims, it doesn’t change the fact that agencies are now under pressure to find ways of reducing and absorbing these costs, while still remaining competitive. And it’s not the only obstacle they face.
The lettings fee ban is just the latest in a series of regulatory changes and industry challenges that have made life more complex for estate and letting agents over the last couple of years. Others include ‘Right to Rent’ document checks and the requirement to join ‘Client Money Protection’ schemes as of 1 April. Throw into the mix GDPR requirements, the need to ensure rental properties meet minimum energy efficiency standards, new regulations on five-year electrical safety checks and the need to make tax digital – along with all supporting records – and a pattern of continual change and adjustment for lettings agents emerges.
On top of these operational obstacles, letting agents are also trying to work out how their businesses will be impacted strategically by the tremendous growth in Build-to-Rent (BTR) market. There are going to be thousands of new, purpose-built rental properties in the coming years, in communities that include concierge services, gym facilities and other such attractive benefits. Letting agents are going to have to work with BTR investors, owners and managers to carve out new roles for themselves – and do so before their competitors get in there first.
All of the above shows that, while the Tenant Fees Act is a significant landmark, agents were already under pressure in a challenging and increasingly costly market. As a result, it is becoming more and more important for those agencies to look at ways they can reduce expenditure, without compromising (in fact, increasing) efficiency or the high level of service they offer their customers. Many of them are achieving this by employing estate agency software that helps them manage their portfolios, and we are seeing this growth first-hand. A recently published MRI Software survey of CEOs, directors and top managers in the property sector revealed that the overall uptake of property technology in the UK is strong, with two thirds (66%) of survey respondents already adopting a specialist solution.
By making use of technology to streamline processes and centralise all information such as notes, activities, leases and opportunities, agents can complete daily tasks more efficiently and better track key business activities and relationships. It is crucial to adopt a data-driven culture when managing consumers, clients and stakeholders today because it allows agencies to gain actionable insight into their operations to better inform business strategies and activities. We can see this growing importance from the results of the MRI survey where half of the respondents (49%) see specialist technology as critical to growing their business, boosting productivity and tackling regulatory challenges.
By employing such technology, agents will also radically modernise their systems, which in turn will help them meet the expectations of today’s tech savvy renters, landlords and employees who demand fast, efficient and top-quality services from businesses. These high expectations mean businesses who do not adopt modern practices will not be able to survive, let alone thrive, in this fast-changing UK rental sector. Without digital solutions, agencies can no longer keep up, and investing in technology is quickly becoming non-negotiable. This is not only so that they can deliver better value for their customers, but also to equip themselves with data and analytics that can help them seize commercial opportunities and can take their businesses to the next level.