How technology will help address critical issues for the UK’s rental market in 2018
With 2017 drawing to a close, naturally predictions come flooding in an attempt to uncover what the next 12 months will have in store for us. But let’s begin by reviewing what this year has meant for the UK’s rental market, before exploring the role of tech in addressing key issues affecting this space.
2017 was bookended by two significant government announcements impacting renters, prospective homebuyers and landlords. Firstly, in March the Chancellor Philip Hammond unveiled that lettings agent fees would be banned, ostensibly helping reduce the cost of renting (although many argued that agents would instead increase rents to recoup these lost fees). And then, in November, Hammond made the bold step to cut stamp duty for first-time homebuyers.
Renters will have welcomed both decisions, which are at very least attempting to alleviate the financial burden on tenants while at the same time supporting them to get onto the property ladder. However, as we enter the New Year, there’s no question that important challenges still remain.
At present, there are 5 million privately rented households in the UK – that’s 21% of the total number of homes across the country. By 2021, this figure is forecast to rise to 5.79 million, or 24%. And as the nation’s rental population expands, demand for rental properties increases and, in turn, rental prices continue to climb.
Coupled with this, underlying issues around tenant rights not being respected, not enough long-term tenancies being offered, and unscrupulous practices by lettings agents (such as advertising properties that are, in fact, not available just to get enquiries in) are all damaging the rental sector. However, the rise of proptech is changing all this.
Thanks to the introduction of new tech-based solutions – such as apps, online platforms or even the use of virtual reality and drones – the whole property industry is on the cusp of a proptech revolution. Indeed, the proptech sector is booming, following the lead of fintech by becoming a disruptive force led by innovative start-ups keen to upset the status quo and make life easier for consumers and businesses alike.
Let’s look at a couple of examples. One of the most obvious is the rise of online lettings and estate agents. Today, the entire process of renting or buying a house can be completed online, with easy-to-use dashboards replacing cumbersome back-and-forth procedures with agents, improving transparency and also saving people a lot of time. Tenants, landlords, homebuyers and sellers can all save money by using these tech solutions because they are not reliant on slow, out-dated processes and a huge amount of legwork to be completed offline.
Another example comes in the form of companies that are doing away with deposits. Helping tenants get rid of difficult upfront costs, there are various proptech firms out there today which almost act as insurers, enabling renters to pay a small fee for cover and then only having to worry if something actually goes wrong during a tenancy.
In 2018, awareness of these proptech solutions will inevitably increase. And as more users embrace the efficiency and cost savings such tools deliver, there will be a natural growth in how comfortable people are in relying on tech for renting, leasing, buying or selling of a property. In the same way that many consumers today are perfectly happy using apps to conduct sizeable financial transactions or gain better insight into their expenditure, next year and beyond we will see the British public adopt a similar “tech first” mindset for finding and creating their ideal place to live.
This was a guest post by Fareed Nabir, CEO of LetBritain.