No one would argue that unfair fees and practices by rogue landlords is a problem that should be ignored, but the government seems to be taking a blanket approach when it comes to the private rental sector.
The Tenant Fees Act, which came into effect in England in June, bans all landlords from charging renters most letting fees and caps deposits.
While nobody denies that there has been a serious problem with unjustified fees being charged to renters by a minority of landlords and letting agents, this attempt by the government to make the rental market fairer puts agencies under increasing pressure to find ways to reduce and absorb costs but remain competitive. Subsequently, many face losing a significant proportion of their revenue.
The Tenant Fees Act is far from the only hurdle thrown in the path of agents in recent years. Indeed, the industry has seen a number of government initiatives increase their regulatory burden and the ban is just one of many industry challenges that have made life more complicated for agents.
Others include ‘Right to Rent’ document checks that require agents to thoroughly vet prospective tenants to see if they can legally rent a property, ‘Client Money Protection’ schemes, minimum energy efficiency standards, electrical safety requirements and GDPR requirements – to name just a few.
For many letting agents, it must seem at times that they risk death by a thousand cuts.
But there are things agencies can do in the face of these mounting challenges. It has become clear that technology can play a central role in empowering them to reinvent and futureproof their businesses – not only helping them to offset lost revenues and create new revenue streams but, more importantly, enabling them to enhance the level of service and value their agencies offer.
Renters today demand fast and highly personalised services, and for agencies to differentiate themselves, they need to take a customer-centric approach that enables them to build loyalty among the residents they are responsible for through a data-driven approach to the services they provide.
Through greater use of technology and data, agencies are better able to streamline workflows and centralise all information, which can free up time for agents to focus on building relationships with customers.
They are also better-equipped to tailor their services and gain actionable insight into their operations to make accurate, strategic decisions about business activities.
We can see this growing importance in the results of a recent MRI survey of CEOs, directors and top managers in the property sector, where half of the respondents (49%) see specialist technology as critical to growing their business, boosting productivity and tackling regulatory challenges.
To successfully navigate the current tide of change, agencies need to adopt new ways of working and technology that modernises current business models.
Investing in data-driven technology is rapidly becoming not just a nice-to-have but an essential imperative.
In the fast-changing rental sector, it is vital for letting agents to have the ability to meet shifting market conditions and growing consumer expectations.
*Trevor Youens is managing director of residential solutions UK at MRI Software