Traditional letting agents could be on their way out – it has been claimed.
City AM’s Katherine Denham says the danger posed to them is not going to be regulation but the tech-savvy younger generation of renters.
She envisages a future where there will be agents charging the wealthiest tenants a high fee in return for an excellent service.
“At the same the number of online agents like Purplebricks will rise to reach the mass market,” she says.
Denham says that the lettings industry seems “blinkered to the dangers, underestimating the threat posed by thriving online businesses, and millions of tenants who are fed up with paying over the odds to get little in return.
“There’s a generation of renters who may not be able to afford to buy a house, but who are not prepared to put up with unprofessional letting agents forever.
“And while some agents are upping their game in response, many aren’t doing themselves any favours and show little interest in trying to win over this generation.
“Really, it’s not the imminent rules that letting agents should be panicking about. It’s tech-driven millenials who could well be the death of this industry.”
Denham, who says some letting agents are “reliably awful”, says the sector is “oblivious to the peril it is facing”.
She adds that it has made little effort to make amends over the past decade: “The bad reputation is still exacerbated by hefty letting fees that are hidden within complicated structures.
“Property agents have a reputation for milking people out of money . . . it’s an experience that anecdotally seems widespread.”
Denham believes that banning tenant fees, and forcing agents to sit exams are welcome.
She says the changes mimic those which have reformed the financial advice sector.
The Retail Distribution Review sparked a decline in the number of financial advisers, and allowed online advice services to plug the gap being cheaper and faster.
“You can see the property agent industry heading in the same direction,” she says.