The lettings industry is very much a people business. But there are growing concerns that the property professionals who make up the crux of the sector – from letting agents to property managers – haven’t adapted to modern-day methods.
Consequently, landlords and tenants are growing tired of outdated processes to rent and let homes. For many, the answer of how to modernise the lettings market involves the use of technology. Yet, property professionals haven’t always welcomed tech with open arms.
With the global pandemic accelerating digital needs, not to mention the growing number of tech-savvy landlords and tenants, it now looks like it’s only a matter of time before technology truly embeds itself in the industry.
The result will be happier landlords and tenants, plus property professionals who feel empowered to provide an even better people service. But just how does technology ensure an improved service from the humans that make up the bulk of the lettings industry?
The property players
There are four fundamental components in the lettings market: the landlord, tenant, contractors and the property itself. Then you have the letting agents and property managers, who act as the glue that holds everything together.
At least they do in theory. However, dissatisfaction with the way many letting and property management companies are run has led to frustrations from both landlords and tenants. That bugbear is mostly to do with agencies using the same processes today that worked 20 years ago.
The Property Ombudsman, which is a government-approved organisation that protects homeowners, landlords and tenants, receives more than 1,000 complaints about letting agents per year. There is clearly a disconnect, which doesn’t bode well when agents and property managers play such a fundamental role in the entire process, from finding a new renter to managing the in-life tenancy.
The letting agent conundrum
So what is the issue with letting agents? Is it lousy service? Well, yes. But that doesn’t mean property professionals aren’t capable of providing an excellent service. Their people skills are usually exemplary, which is ideal for an industry rooted in, you guessed it, people.
Instead, the problem revolves around the majority of letting agents mostly being stuck in the dark ages, refusing to adopt technology as a forward-thinking way to power their agency. The people-side of the business should be supplemented with processes that offer landlords and tenants more transparency and easier access to information.
The fact that it’s not is holding the UK lettings market back, which is a problem for both landlords and tenants.
The communication problem
A lack of communication between the letting agent or property manager and the tenant can lead to fairly straightforward issues (like repairs) becoming drawn-out sagas. Typically, a tenant needs to call or email the property manager and report an issue.
The agent then gets in touch with a contractor to review the work, at which point they need to arrange a time with both parties. Once everything is set up, the landlord has to give the go-ahead, and the contractor needs to arrange a time to do the actual work.
Such a process feeds through the property manager, who is relying on multiple phone calls and emails to manage everything. To say it’s a juggling act is an understatement. The result is often a delay in issues getting fixed around the home, which leads to tenant dissatisfaction.
Enough problems for the tenant can even see them leaving the property once their AST has expired or the break clause comes into effect, as they often think the landlord isn’t providing a good service. Consequently, landlords endure void periods and tenants form a negative option about letting agents and property managers.
The landlord problem
Worrying about void periods is enough of a concern for landlords, but lack of general communication still plays a role in forming a fragmented relationship with agents and managers. Other industries, like banking and investments, provide their clients with a 24/7 overview of their finances and every aspect of their investment.
Property managers do provide a monthly statement that details elements such as financial incomings and outgoings. Too often, however, landlords don’t have any real oversight into their property. They don’t know how their portfolio is working for them on a daily basis.
This leaves them wondering if they’re getting genuine value out of the property manager, with many even opting to go it alone and manage the property themselves, as they feel the fees charged aren’t worth the service provided.
Using technology to improve the lettings market
Technology has the ability to solve two problems at once: landlord and tenant issues. It can also empower agents and property managers. Having access to vast amounts of information at once means there is more transparency and understanding for all parties.
Tenants should be able to report issues and see the stage of their repair in real-time. While landlords need instant access to their portfolio, from finances to an overview of their void periods throughout the year so that they can better understand their investment.
Importantly, letting agents and property managers can rely on technology to better inform them about decisions. It will streamline many processes, too, with instant access to client accounts and smarter ways of communicating leading to a more robust service.
A tech-led answer
For too long, processes have been outdated and fragmented. But it’s time for the lettings market to come in line with other industries that use technology to empower their clients and employees. A new normal is finding its way into the lettings industry, and it will improve every aspect of lettings and property management.