Click, click, result. That’s the sound of instant access, something found in many industries that have undergone a digital transformation. Technological advancements have created more seamless and transparent features for consumers, and it’s resulted in options that only take a few clicks or taps.
From banking to hailing a taxi, many industries have successfully bridged the gap between a digital offering and physical interaction. Bricks and mortar, however, still finds itself firmly rooted in traditional approaches while everything around it changes.
While there is a crumb of comfort in the fact that lettings and property management is starting to embrace tech-led initiatives, why has it taken this long? And what can the industry learn from other sectors like banking and investing while it undergoes its transformation?
Property and technology: a match made in…?
The UK lettings market is no stranger to technology. Proptech – technology in the real estate space – has been around for more than a decade. Ideas and implementations have come and gone, as companies have tried to add a technology element to the sector.
Only a few of these initiatives have remained, and the result is a mishmash of old, archaic manual processes and technology performing at only half of its capacity. For example, the tenant referencing process and contract signing are mostly digital now. But the in-life tenancy that follows relies on phone calls and long, complicated email chains to property managers.
Then, on the other side of the spectrum, you have a case of too much technology. Some online letting agents have perhaps taken the tech model too far, removing a significant chunk of the human element.
The result has seen traditional lettings set-ups resist tech even further. They see it as a threat to their business model, when it should, in fact, be something that can enhance their day-to-day working set-up.
What’s left is a stand-off, where the tech is available but not always embraced. Or it doesn’t quite match up with the human side of operations. Other industries, however, have found the ideal balance between technology and people.
The banking revolution
Today, the banking sector is a perfect blend of technology and people. Branch numbers have reduced, becoming places for appointments with low wait times. It leaves the most basic aspects of banking in the digital world, with the day-to-day handling of accounts done online – either on your computer or smartphone.
But the sector took a while to get it right, and many initially pushed back against the idea of any kind of disruption to banking. The first sign of online banking dates back more than 30 years – before the internet was even a thing.
Homelink, a Royal Bank of Scotland feature, was the first foray into online banking during the eighties. Clearly, technology hadn’t evolved at a level for the concept to really take-off. It wasn’t until 2010 and onwards that we all became so dependent on banking online.
Seven out of 10 people now use online banking in the UK, and it’s the fastest-growing reason why people use the internet. By 2020, the financial tech (fintech) sector will be worth an estimated £245 billion.
So what did it do to convert the non-believers?
Finance in real time
There is one common theme in tech-led companies, no matter the industry: accessibility. Online banking won people over because it gave them instant access to their bank details and allowed them to manage their day-to-day banking requirements without any help.
A few clicks give you complete access to your accounts, where you can see money coming in and going out, make payments to other people, set up standing orders and direct debits. It provides complete transparency and is easy to use.
Yet, that doesn’t mean there isn’t a need for banking professionals. The accessibility of online banking enhances their position, allowing them to focus on the important aspects of their job. Essentially, it’s a win-win for tech and humans, and an overall victory for consumers. They have an easier way of navigating their finances while maintaining full human support.
Will you drive me home?
Banking and driving couldn’t be further apart in terms of their core purposes, yet they’re tied together by technology. Before 2013, getting a taxi in the UK required you to hail one down or find a minicab office if you were outside of central London.
Today, however, there are a handful of apps that can get you on your merry way within a couple of clicks. Uber is the most obvious option, and it revolutionised the way people hail a ride. It created an entirely new market, marrying technology (the app that you use to order a ride) with people (the drivers who take you to your destination).
The food and beverage industry has got in on the act too, adding a third element: restaurants. Nowadays, ordering your favourite dish from a Michelin star restaurant is a reality that relies on the Uber business model, to the extent that Uber even has its own food-delivery service.
Rewards without effort
Like banking, Uber and other ride-hailing companies made their product accessible and convenient. They found something that many of us relied on (taxis), taking an outdated method and turning it into a modern business model that caters to the needs and demands of its audience. There’s plenty that the lettings and property management market can learn from Uber’s approach.
The fact that banking and ride-hailing are so different, yet found common ground with technology, shows that it can apply to any industry. And the lettings market is ripe for a tech makeover. From the landlord’s perspective, treating the management of their property like a banking app can help evolve the industry.
Landlords should have instant access to their portfolio without the need to rely on a monthly statement or phone call from the property manager. Elements like contract length, incoming rent, maintenance costs, compliance documents and void periods should all be accessible with the click of a button. This will give landlords complete oversight of their investment.
The use of technology, combined with savvy human service, can also facilitate the entire tenant-finding experience for landlords – from online viewings to the renter getting the keys to their new home.
Tenants, on the other hand, can benefit from the Uber approach, using technology to manage their in-life tenancy. From using an app to arrange maintenance repairs to seeing compliance docs and the length of a tenancy, the digital transformation of the tenant lifecycle should appeal to a growing number of tech-savvy renters.
There also won’t be any issues for letting agents and property managers who previously found that most of their time was taken up by procedures that landlords and tenants should be able to take of themselves. Instead, the technification of the industry will allow them to provide a more bespoke service to their clients.
The UK lettings market 2.0
Sometimes technology takes off instantly, revolutionising an industry overnight. That was seemingly the case for Uber, who enjoyed an extraordinary rise. Other times, however, it’s a slow burn – something the banking industry can attest to.
The lettings market is ready for a technology overhaul while still relying on the human aspect of providing great service provided by property professionals. It’s been a long time in the making, but it feels like there’s finally a sea change that will see smarter and more transparent processes when it comes to lettings and property management.
This article is an expansion of Herddle’s white paper, “How to Improve the UK Lettings Market With Technology and Service White Paper”, which takes a deep dive into the current state of play in the rental market.