Proptech Weekly #49 – The Rental Revolution| Rayhan Rafiq-Omar
Friends, Feudal Landlords and Commoners,
The big news this morning was Robert May’s tweet commenting on the other big news:
“Agents will also be required to tuck tenants into bed and make sure they have a teddy or blankie!” Link
He is of course commenting on the impending ban of lettings agents charging fees to tenants.
Instead of wading into the topic – as everyone else invariably will be – I’d like to focus on this announcement being the catalyst of change.
First, some background:
Lettings Agents didn’t always charge tenants – indeed when I started out in 1999, the world of lettings and management was largely the same as it is today with the sole exception of fees: everyone charged 15% + VAT.
But we all know that’s a rarity today and most landlords have squeezed fees downward. In response, most agents have taken the Foxtons approach to recouping lost profit from tenants.
That in itself isn’t what bothers me: why has the level of service to tenants remained the same in the face of them paying more in both rent and agency fees?
Anthony Payne, the highly respected founder and MD of Lonres tweeted yesterday:
“Recently tried to view some houses in West Sussex on a Saturday. Told by 1 agent they were too busy and the other still hasn’t called back. I am a defender of traditional estate agency but they will have a limited lifespan against online if this is the service they offer.” Link
There are certainly calls from tenants, lobbying groups, build-to-rent developers and even politicians for tenants to be treated better.
But what does better look like?
1. Know the people behind the property
If property is becoming a service, who owns and operates that property matters. And like any service, the opinion of past customers matters more.
Many have tried to create a Tripadvisor for landlords, and for many reasons they’ve struggled.
Movem however has over the last 3 years found a sweetspot: deliver better tenants to agents and landlords.
By allowing both sides to rate each other, and focusing on enabling more confident transactions, Movebubble now has a presence in most University towns across the UK.
The company has most recently been working with agencies to provide access to better tenants in a way agents can prove to their landlords they get better tenants – and therefore win more business. Genuine value add.
And of course the better agents quickly rise to the top of local renter consciousness as those are the ones who are happy for their tenants to provide feedback – and this is the important bit – that the agents genuinely act on to improve.
Over time Movem has amassed unique data to create trust.
2. Booking viewings conveniently
If you can expect a taxi in minutes, and receiving a delivered meal is only a few minutes more, why does it still take days to book a property viewing?
For all the talk, almost all agents – online and traditional – fail with the booking of viewings.
Negotiating time slots, not enough staff on hand to conduct viewings, not enough information about the property at the viewing, vendor/landlord being out or having tenants in who have their own schedule to be negotiated with.
Booking a viewing for property is at best an anxiety-inducing barrier and at worst an absolute nightmare.
It doesn’t need to be this way:
– Apply.Property are offering agents the ability to have tenants book viewings online quickly and in-sync with an agent’s calendar.
– Even better, Viewber can fill in the gaps where an agent cannot conduct the viewing themselves.
– And then there is Movebubble who currently take on negotiating a convenient viewing time and who are giving agents an app to mirror their tenant app, so that all viewings move from analogue processes like negotiating timings over the phone – which can’t be done at 10pm when your agency is closed. More on Movebubble later.
3. Professional landlords replacing amateur
While there is talk from build-to-rent providers about better service for tenants, giving them a cinema room and increasing the service charge isn’t better service.
Rentify are taking the novel approach of industrialising Guaranteed Rent.
That way they pay the landlord a fixed monthly rent at close to market price.
What it really means is they can control the tenant experience and ensure a level of service that far exceeds anything else out there, so that tenants recommend Rentify the way foodies recommend Deliveroo.
If people never leave the Rentify ecosystem, there’s value in that for landlords. And for the first time could put credence to the statement that tenants have choice – currently all agents behave roughly the same. Agents get painted with the same brush of the lowest common denominator, because they aren’t sufficiently different from the bad agents.
4. No more phantom listings
Searching for a place to rent is a game of chance.
It’s hard to see how this will ever change.
But the aforementioned Movebubble are trying to, like Rentify, build an ecosystem that is so much better that renters turn to them first, never go elsewhere and recommend it to their friends.
What is Movebubble?
– it’s an app for renters to find a property to rent
– they ‘curate’ a list of property based on a renter’s search history – if you rejected the property with a small living room, you’ll see fewer small living rooms going forward
– renters book viewings through the app and Movebubble either book the viewing manually with the agent (they have an army of people booking thousands of viewings a month)
– they now have an agent app to help automate booking viewings and also receiving offers from renters in a method not too dissimilar to Apply.property’s core features that are available to traditional agents currently.
Imagine not needing an administrator in the office to take calls, book viewings, conduct referencing and print off contracts – all these analogue tasks should have long been confined to history along with the fax machine.
That’s what the technologies above allow. But who will provide this better service?
Will it be traditional agents enabled by Apply.Property, Movem and Viewber?
Or will Movebubble provide a service so sticky that they quickly become the ‘Amazon Prime’ that aggregates the attention of renters?