The popularity of property auctions in the UK has increased enormously in recent years, supported by popular TV shows such as Homes Under the hammer and a sharp rise in the number of regional and national property auction firms popping up.
There are now a wide range of people acquiring all sorts of properties at auctions, from bargain hunters to private investors, ensuring that there are many clear advantages to selling at auction, and not just for the vendor.
The quick process and the fact that exchange occurs immediately at the end of the auction period, means that estate agents who market property through this method can speed up the process and eliminate the risks of gazumping and gazundering.
With a number of partner programmes available nationwide, estate agents can often increase business by teaming up with auctioneers to sell property that not only enables agents to extend their property sales services, but also allows them to successfully sell more properties for their clients, and generate additional income in the process.
But while more agents are now prepared to offer sales by auction, are they willing to consider doing the same as far as the rental properties on their books are concerned?
A new rental auction platform, which offers prospective tenants the opportunity to bid for rental properties online, is set to launch later this month.
LetsBid4Lets.com will provide letting agents with software that enables them to list a landlord’s rental property in an auction format and subsequently allow prospective tenants to bid for it online.
We all know that online marketing is a field dominated by those with the foresight to plan ahead, anticipate changes, and jump on trends before their competitors do, but is this new auction platform one that will genuinely offer letting agents a competitive edge?
To find out more about LetsBid4Lets.com, we talk exclusively to the website’s founder and chief executive, Spencer Rose (pictured below right).
We all know that auctions are a popular place to buy and sell property, but why do you feel that this format will work in the letting market?
The world has changed, but the way to let a property remains exactly the same as when I joined the sector during the late 1980s.
Our logic with this business is that auctions are a tried a tested way of selling property and people understand it, but no one has applied it to the letting process yet.
We believe it can provide transparency for the process both for landlords and tenants. It guarantees landlords with pre-referenced tenants and market rent and tenants with a level playing field.
Part of the reason property auctions are successful is that they allow purchasers to avoid the conventional drawn out process of buying property, but renters don’t have the same problem. So what’s the point in Letsbid4lets?
We believe that there is still difficulty with transparency between parties when renting a property. If the market is buoyant, tenants are in competition with each other. If the market is flat, landlords have rental voids.
Letsbid4lets puts everyone on level pegging, with guaranteed transparency for all involved.
So you think that letting property via auction a fairer system, in that it can make the letting process more transparent?
We believe so, as it makes the market a level playing field. Tenants can only bid up to their reference limit and landlords achieve market value.
A similar service for landlords, Rentberry, which launched in the U.S. last year, now lists around 100,000 properties on its site and claims to have more than 50,000 users. Do you expect to replicate their success over here in the UK?
We hope to!
LetsBid4Lets was conceived before Rentberry, but Rentberry has proved landlords and tenants like the concept.
Rentberry is different in that it takes the agent out of the loop and acts as the agent.
LetsBid4Lets provides agents with exactly the same marketing techniques, allowing a new revenue stream, at the same time as assuring tenants and landlords that they are dealing with a reputable agent, with the software to bid on properties.
We want this to benefit agents, landlords and tenants alike. But when Rentberry launches in the UK there is a worry that it could take business off agents, so we’re offering agents the opportunity to take up the technology before that happens.
Before allowing prospective renters to bid for property at auction, what due diligence will LetsBid4Lets undertake to ensure they can afford the rent, not to mention have the ‘right to rent’ in this country?
Tenants using the site will be pre-referenced by FCC Paragon before being allowed to bid.
These references will last for 60 days so if a tenant doesn’t win on one property then they will be able to use the same reference to bid on another. This will be a first for the UK rental market.
Not only are they pre-referenced, but tenants cannot bid for a property unless they have viewed it via the letting agent who is advertising it.
Have you received any feedback from letting agents and landlords?
We are holding a pre-launch event to demonstrate the concept at The Shard on Thursday 29th June with key industry speakers - James Dearsley, the UK’s number one influencer on property technology and Anthony Codling, economist, analyst and forecaster of future property trends.
We have invited 200 top agents and will look to them for feedback on the concept.
We are also keen to share the event presentations with every agent who is interested. Agents can register for the information at www.LetsBid4Lets.com.
How much will your service cost agents?
LetsBid4Lets provides agents with a whole new revenue stream. The planned cost will be £5 per property and can be used in conjunction with traditional marketing methods or as a standalone tool.
We suggest that agents charge landlords £25 to use this service which can be used in conjunction with traditional methods or as a standalone marketing tool due to auctions providing a date to focus everyone’s attention.
*Marc Da Silva is Estate Agent Today and Letting Agent Today Features Editor. You can follow him on Twitter @propertyjourno