Following the dark winter months we can now look ahead to the season of spring flowers and manifestos for the housing market. A general theme emerges on the importance of the rental sector and the need for ensuring quality and integrity across the spectrum of players operating in the market.
Few would disagree with this sentiment and research we have recently completed here at Cluttons underlines the importance from a business perspective. The research was undertaken to better understand tenant decision making.
The focus for the work was to better understand the corporate model for residential lettings and how this compares to the non-corporate model. The corporate model was represented by London's Great Estates, but the findings of the work have relevance to the market as a whole.
The research comprised a survey of tenants, undertaken on half of Cluttons by YouGov. This sought to investigate the tenant decision making process in choosing a rental home in Central London, and then their views on their property, location and landlord once they were in place.
We found that tenants' motivations are very differently configured depending on where they are in the life-cycle of their renting experience. At the search stage location, in terms of proximity to work in particular, is uppermost in the mind. While this remains important once a tenant is settled in their home, the local environment rises up the agenda. There is a marked increase in the value tenants place on amenities, green space such as parks and squares, the village feel and local community.
From a property perspective, the internal specification, layout and size is most important at the search phase, with relatively little regard for the management quality or landlord. However, this factor becomes considerably more important to tenants once they are in place. This is probably not a surprise.
However, the research also finds a clear relationship between quality and professional management and the propensity to renew. This relationship is found to be considerably more important than any other factor in the rental experience in defining how long a tenant will remain in place.
Importantly this management experience encompasses not just the relationship and performance of the landlord per se but also the agent with whom the tenant interacts. This makes sense. More often than not a tenant will have a closer relationship with their letting and management agent than their landlord.The implications are clear. The performance of a residential asset will be, in part at least, determined by their choice of agent and the quality of experience they provide to tenants under their charge.
The lessons are not for the much quoted and annoyingly named rogue' landlords and agents. They are for all landlords (and their agents). Professional and responsive management is not as we know the preserve of corporate style landlords, whether established and emerging.
However, the qualities identified and valued by tenants in the Great Estate approach to property management and tenant interaction, are undoubtedly relevant to all in the sector, including agents. The financial reward for quality and professionalism is also not just for the landlord either; the sector as a whole will benefit, which is good for business and the housing shortage pickle in which we find ourselves.
*Sue Foxley is Head of Research at Cluttons