On Wednesday, EYE ran a blog by Andy Halstead who claimed that agents do not need ‘PropTech’ to negate the loss of income set to be caused by next year’s ban on tenancy fees. This is how one firm, Goodlord, rebuts his claims
There’s no debate that the lettings industry is in a state of flux, with new legislation and increasing regulation challenging the traditional business models of many agencies.
Like Andy Halstead, we agree this changing market will also offer agencies new opportunities, but we believe that technology will be essential for those who want to derive the most benefit from these opportunities.
We agree that not all PropTech has been proven to offer tangible value for agents and it certainly isn’t a ‘silver bullet’.
However, some PropTech solutions do solve real world problems such as allowing agencies to cut costs and automate manual administrative tasks so they can focus instead on generating revenue or providing better customer service –things that are going to be essential in the changing lettings market.
Technology can also make it even easier for agencies to offer additional services to their landlords and tenants and therefore, drive even more revenue.
So why wouldn’t agencies want to maximise the current opportunities before them by harnessing the power of technology?
£5 referencing is real
Agencies’ concerns shouldn’t be “How much is company X making from my reference?”.
It should be “What’s the lowest price I can pay for a comprehensive reference?”.
The priority of agents should be on securing reliable and responsible tenants for their landlords in the quickest and most cost efficient way.
Our customers asked us if we could reduce the cost of referencing – while still maintaining the quality of service – and providing the functionality and opportunities to increase their revenues elsewhere, so we did.
We created a holistic and tech-powered agent offering that matched the needs of our customers in a turbulent industry – and allowed us to charge our customers only £5 for a comprehensive reference.
Tenant fee ban
The Tenant Fee Ban is going to have a significant impact on agencies’ revenues – this isn’t in doubt.
We believe the best way to combat the potential loss is by offering a combination of additional services to both your tenants and your landlords while looking for a solution to automate time consuming tasks and streamline the customer journey.
Revenue can be generated from areas such as insurances or utility and media switching, but the way in which these services are presented to customers is crucial in increasing take-up rates – which is why frictionless routes to the best services in the market need to be in place.
For example, whilst GDPR has increased complexity, platforms that digitise the lettings process can provide tenants with a GDPR-friendly journey.
Importantly, this also provides agents with a shop front to easily and efficiently offer additional services that can be purchased with the click of a button at the optimal time, increasing conversion rates and ultimately revenue.
Protecting your landlords
We agree it’s important to protect landlords against losses to income from unpaid rent or void periods, which also protects your relationship with the landlord if a problem were to arise.
Offering and fulfilling rent protection insurance with a single click, as part of a digital customer journey, makes it much easier for agents to suggest and landlords to take rent protection.
This ultimately increases take-up, ensuring that agents are protecting their landlord’s best interests whilst creating more recurring revenue for their agency, with no additional work.
Valuing your tenants
We agree it is important for agents to see tenants as a valued customer.
There is an opportunity to generate more business from tenants in light of the revenue loss from the fee ban by adding move-in services and insurances, while at the same time, providing an enjoyable experience that results in a positive review online.
This means letting agents need to be meeting their tenants expectations for customer service in the digital age – which means offering a streamlined, mobile-friendly experience that allows tenants to complete their renting journey whenever and wherever they want to.
It’s important to note there are significant differences between selling to tenants and selling to landlords –when you’re selling to tenants, you need to make it as easy as possible for them take up offers of additional services while they’re in the move-in mindset.
Harness the power of PropTech
Agencies do need to take action in the face of increasing challenges.
The imminent Tenant Fee Ban means agents must start thinking about how they will win more instructions, create more revenue from their growing portfolios, and manage the increased administration that will result from letting more properties than ever.
We believe the best approach to these challenges isn’t only about generating new revenue streams – it’s about harnessing the power of technology simultaneously in order to improve internal efficiencies, enhance the customer experience and ultimately, ensure agents are turning the current moment to their advantage.
* Tom Glason is chief operating officer at Goodlord. Some comments on the original commentary by Andy Halstead were removed by EYE as the testimonials appeared to be from connected parties
Do you really believe the priority for agents is to have the lowest priced reference available?
I guess that explains a lot…
In other news, when will you release the £4 reference? I’m holding out until then.
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Thanks for the comment ‘Light’.
I think you may have misunderstood the point here; with the advent of the tenant fee ban and the inability to pass the cost of a reference onto a tenant, many of our customers were keen to reduce this cost for their agency. They asked us how we could support a reduction in the cost of a reference, whilst still maintaining the same level of comprehension and service. We came up with a holistic package of services that enabled us to recoup our costs of a reference in other areas.
Interesting point about the £4 reference – this is unlikely to be the next thing that we do, but we ultimately believe that the direction of travel for referencing is that it will become free. Our customers are fortunate that we’ll be able to support this soon, as again, we’ll be offering a suite of services that enables us to recoup any costs associated with that reference in other ways, whilst still ensuring that agents get a very positive return on any investments they make.
Happy to discuss further if you want to connect with me directly.
Best wishes,
Tom
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All I know is rents will go up and tenants will loose out.
I am not a charity, I will still get my fees but from the landlord who will charge more rent to the tenant to cover.
I have no interest selling poxy utilities for a couple of quid.
I also know I will now be working for the landlord as they pay my fees 100%
If the tenants start moaning about something that will not benefit the landlord being sorted or does not break my legal obligations they can ‘Go swivel’
Why they did not put a cap in place is beyond me.
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Just putting the record straight;
I didn’t say agents don’t need PropTech, I said that often PropTech falls short, does not always do what it promises to do and that there are so many solutions in the market looking for a problem
It’s impossible to complete comprehensive referencing for £5.00
Tenants do not just click to buy, they respond much better and conversion rates are much higher when they receive a friendly, helpful call
There is a significant difference between customer experience and customer service. At Let Alliance, the former is a qualifier, the latter is what we focus on
Let Alliance is profitable, does not require continuous external funding and can be trusted to be here for agents over the long-haul. This is not the time for agents to work with untested partners and untested propositions, time is running out. We fully embrace ‘PropTech’ but only the firms that have demonstrated long term success. This is why we integrated with Reapit and LonRes, both outstanding technology firms that serve agents well.
Otherwise……. You seem you agree with what I have said.
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Thanks for putting the record straight, Andy – that’s helpful.
With regards £5 referencing, for complete clarity, I am not debating the fact that it costs at least £5 to complete a comprehensive reference. What I am saying is that by packaging up some of our products & services for agents, we’re able to recoup our costs of a reference in other areas so that we can afford to charge £5. As mentioned above, we’re not that far away from offering comprehensive referencing for free. As a traditional referencing vendor, I’m sure you think this is crazy! As offered previously, I’m happy to discuss further to explain how this is possible. Just let me know if you’d like to take me up on this offer.
Completely agree that tenants don’t always want to click and buy services and that conversion rates are higher when they receive a friendly and helpful call, which is exactly why we make this call. However, conversion rates are much improved when you have a digital tenancy progression platform that can educate and warm up tenants in an effective way before receiving that call. There’s some really interesting things that can be done with technology as part of this journey and again, I’d be happy to discuss further with you.
Best wishes,
Tom
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Here you go again, helping to prove my point. ‘Free’ referencing is smoke and mirrors, if you can deliver references for free, I will process 200,000 per annum with you. It costs money to complete a professional reference and the money must come from somewhere. If you shave margins or commissions from other products to cover the cost of referencing, it’s the same as charging. If you charge subscriptions and tie agents into contracts to cover the cost of references, it’s the same as charging.
Of course we can offer free references when they are linked to rent guarantee, replacement deposits, utility switching, I could go on………. the thing is, they are not free, they are paid for through other products. Of course we can offer free references if we charge agents a monthly subscription to have access to our platform, we just don’t. We pay market leading rates of commission to agents, on both new business and renewals, we are completely transparent and all I can say is that our customers seem to like our approach.
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Hi Andy,
We would love to process your 200,000 references completely free of charge, with no obligation to purchase anything additionally.
Feel free to get in touch at any time.
Thanks,
Mike
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Being honest, no outsourced company can do a comprehensive reference for less that £30 IMHO, unless it is completely automated.
Human interaction with referees, checking the bank statements, and cross referencing with in-comings and outgoings, along with social media and google searching is invaluable in spotting some of the *lies* put on an application form.
Also, I have worked with one agency, where possible, they visited the current home of the applicant. No automated reference, can beat a pair of human eyes.
Tech is great for some procedures in lettings i.e. electronic signature, but in some areas, I would not trust it as far as I could throw it i.e. producing tenancy agreements. Some agents have got into the mindset because a tech system has produced X it must be right. That is an attitude which can create huge problems further on down the line. Check, and double check anything which a prop tech system produces IMHO.
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A very good summary. Tenant fraud has never been so prevalent. It is not possible to fully automate a tenant reference.
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I am confused… doesn’t Goodlord just provide a platform for letting agents to forward documents which will confirm if the reference is acceptable or not? when I enquired Goodlord doesn’t actually do the reference.
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Agent123 – You might be thinking of Vouch. Either way both are a low budget offering with very little protection offered to the landlord.
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