The Rise and Rise of Tenant Influence

Lettings, done properly, is not a license to print money. Far from it. It’s labour intensive, full of risk and both tenants and landlords begrudge most of the fees they’re charged. Of course, this has not been helped by certain agents charging unfair fees and lining their own pockets. Or cheapskate agents who set up not knowing what they’re doing, charging very low fees, and with no way of coping with the inevitable problems when they occur.

The upshot is a distrusting public and many well run letting businesses fighting to survive. This helps nobody.

It’s part of the reason a raft of changes are coming the way of the lettings industry in the next year or so that is going to see the industry turned on its head.

The Tenant Fees Ban  

This is going to wipe hundreds of millions of pounds of income from agents’ bottom lines and is frightening even the most positive agent. Many are barely breaking even now and, when this arrives, will be loss-making and going down.

Finding ways to mitigate these losses is all the talk of the industry currently. Landlords are certainly going to bear the brunt of it. Tenants are certainly going to have less cost to take a let.

The Tenant is King 

The slow-down in the sales market has been matched by a thriving lettings market. We have more and more tenants as opposed to homeowners and this audience has a more powerful voice than ever. My own experience is that tenants are more demanding than landlords, but the perception is most landlords are greedy and so there is a swell of favour now finding its way to the tenant. Importantly this is backed by Government who are championing the tenant and hitting the landlord hard at every turn.

It would also be fair to say that the tenant has perhaps been undervalued by agencies, or even taken for granted. This is no longer the case, or at least it’s not with the agents who are staying live to the changes that are happening. A much better relationship is necessary between agents and tenants and that is going to have to come at the initiative of the agents.

Zero Deposit Schemes Gaining Traction 

I know many tenants feel the system treats them as guilty before proved innocent. Having to pay a damage deposit in advance being one example. This has probably arisen in the same way many would bemoan many good agents are considered low lives based on the behaviour of a minority of bad eggs or how football fans are all considered hooligans because of the few who are. 

In the tenant case, this is changing though and one of the ways is removing damage deposit payments. An option to pay no deposit, but pay a fee to a third party who takes over the process of any damages that should be covered at the end of the tenancy is proving very popular with tenants. We are launching this at the start of January with our preferred supplier of this facility – Flatfair.

Tech is working in Lettings

There are some genuinely exciting advances in tech that are making a material difference to the agents' efficiency and user experience. Take up of this technology is allowing agents to reduce those labour costs or have more work done by the same labour force and grow as such. There’s a wealth of new products I will discuss at another time. Not all I’m buying in to, but I’m certainly not burying my head in the sand to the ones I think can have a genuine benefit to tenant, landlord or ourselves.

One such example we also start up within January is FixFLo who provide a system for tenants to report property issues online, in their own language, with some helpful tips as they do it in case the problem can be solved quickly and easily.

My own experience, as I suggested earlier, is to have encountered many more challenging tenants than I have landlords over the years. And I guess most of my horror scenarios in lettings involved tenants trashing a property, doing a runner, growing cannabis (yes, really) or not paying their rent. Those experiences can scar an agent and a landlord.

It’s also true that in the great scheme of things this is a tiny minority. Tenant arrears relate to around 5% of all tenancies. Tenants damaging a property and owing more than they left as a deposit is less than 1%.

I can understand a less suspicious and more welcoming and supportive mindset from the outset by agents is overdue and to be encouraged. Frankly, the agents have little choice but to accept this reality, but better to do so with an appreciation of the situation than because it’s forced. A firm hand for those problem tenants isn’t to be lost and landlords will rightly expect this when they are put into those highly stressful and upsetting scenarios.

An acceptance that the noisy minority should not dictate how the vast majority are treated as we set out our stall for this new lettings world is certainly the approach Imagine will be adopting.

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