In 2025, it’s predicted that half of those in the 20 - 39 year old age group bracket will be renting in the U.K. This age group, a third of whom are likely to rent for their entire lives, has become otherwise known as Generation Rent. Generation rent tenants will have a larger impact on the lettings industry than they ever have before. These tenants will expect a seamless, digital-first proposition from businesses and services across all sectors. 66% of 18 - 34 year olds say they have higher expectations of customer service than they did years ago. Generation Rent expects to be able to do business wherever they are, whatever they're doing and whenever it suits them. From booking a viewing, making an offer or simply searching, they want it all on demand and at their fingertips. Service providers such as Uber instead of taxis, Airbnb instead of hotels, streaming music instead of downloading it on Spotify and watching movies on demand using Netflix, have all seen that this now the way of life. This generation is our future and why are they not receiving this high level of service when making one of the most important decisions, their next home.
The lettings agent
Times change and with that also do industries, agents have progressed from newspapers to web, however the reliance on these portals has taken away from the industry and the key word here is service. The lettings industry has become so embroiled on finding that extra revenue that they are driven by the wrong incentive. Since the Government’s Tenant Fee Act in 2019, agents have been left with no option but to pass the buck on to the landlords. With fewer revenue streams and tighter margins agents have been put in a tight spot. Tighter margins, more asked of them such as right to rent checks and strict money laundering regulations to adhere to has really put a squeeze on the industry. However a question we repeatedly ask ourselves, if a tenant has spoken to an agent in Ealing and this is where they want to live, why oh why does the Hanwell, Isleworth, Chiswick and Acton branches feel the urge to all bombard them about properties in these areas. Even if the tenant is open to several areas the agent should take the time to understand their needs, not where the next fee is coming from. Having three branches with four lettings agents in each branch comes at a high monthly cost, burn rate we prefer to call it. So to reduce the monthly burn rate agencies are hiring within their monthly budgets which as you can imagine are extremely tight, with that in mind we shall leave you to come to a conclusion of where the industry is heading.
Portals and agents, is it love or hate.
As we are all aware property portals are the first point of contact when looking for a home, they serve the industry with a one stop shop of all that the market has to offer. However that comes with a price. With no real innovation in years gone by, using the major online portals can lead to hours and hours of scrolling through properties which do not truly adhere to what you are looking for. Occurring incidences such as listings that aren’t even available anymore to vague information on such things as area, not to mention the relationship between the portals and those whom give them their product, the agent. The relationship has always been a fragmented one, with movements on the horizon such as ‘boycott rightmove’ and ‘say no to rightmove’ the relationship is souring and fast. For years agents deep down felt they were being charged astronomical fees for not much service and these fees were constantly on the upward trend with no innovation or any real improvement for the money they were stumping up month on month. Agents felt that they were not receiving the level of respect they deserved as in truth they were supplying these portals with the product and paying them to do so. However agents also knew that they could not simply just turn their backs on these portals as they did indeed bring in the leads for not much leg work. Hence the love and hate relationship was maintained, until COVID-19 and the lockdown.
Renting in the U.K.
With over more than 4 million renting in the U.K. and all research indicating that this number will only be going up in years to come, renting is fast becoming the norm for future generations. Purchasing a home has become a distant dream for millennials leaving them with no other option. The U.K Government has for years been trying to tackle the shortage of homes and the ever increasing rent prices. Renting a property in the U.K. has become intertwined with legislation and full of barriers for both parties involved. This is not to mentioning the journey people must endure to find their home. The property sector is different to many other sectors, key reason being there is a lot of emotion behind decision making rather than rational. For the vast majority of landlords their property or properties are their prized possessions and giving them up doesn't come easy. Whilst on the other side of the coin tenants paying the majority of their hard earned income to live in that property, which really and truly isn't theirs isn’t much easier.
Conclusion: A marketplace with many complications and few solutions.