There has been a significant shift in the way tenants are paying their rent, with over 50% now opting for open banking rather than traditional bank transfers, according to LettsPay.
The company says that this trend found in its latest research demonstrates a growing appetite for faster, more secure, and more convenient digital payment solutions in the rental sector.
The move towards open banking is not just benefitting tenants, it is also transforming the way letting agents manage payments, LettPay claims.
When tenants pay via open banking, funds are automatically reconciled in real-time, reducing administrative workload and ensuring landlords receive their payments promptly.
By removing friction from the payment process and automating reconciliation, open banking aims to help ensure that rent is paid on time.
LettsPay commercial director, Matthew Gibbard, said: “As the rental industry continues to modernise, the adoption of open banking is a clear indicator that tenants and agents alike are embracing financial technology that enhances efficiency, transparency, and financial stability. With automation playing an increasingly crucial role in property management, this shift marks a turning point in how rental payments are processed in the UK.
“Improving both the speed and efficiency of client accounting is core to the Lettspay proposition and enables time and resources in a lettings and property management businesses to be channelled into the delivery of improved services and business growth.”
This week’s DPS report highlighted a major shift in the lettings market: the number of new tenancies has dropped to an eight-year low. Combine this with longer tenancy durations—now averaging 2.5 years—and the financial model for many letting agents is under increasing strain.
Agents typically rely on regular tenancy renewals to generate fees that cover fixed costs and supplement sales income during quieter periods. But with fewer new lets and longer tenancy cycles, it now takes significantly longer to fully earn fees from a portfolio. At the same time, annual sales transaction volumes continue their slow 2% decline, meaning the overall fee pool is shrinking.
The shift from Assured Shorthold Tenancies (ASTs) to Assured Tenancies, alongside the abolition of Section 21, is further reinforcing this trend. With reduced churn, agents who aren’t optimising their operations will feel a growing squeeze on revenue.
This is why I see and am personally excited by LettsPay’s open banking adoption as more than just a tech upgrade—it’s an essential cost-saving measure. By automating rent collection and reconciliation, LettsPay is cutting admin, improving cash flow, and enabling agents to operate more efficiently at a time when margins are tightening.
Efficiency is no longer optional—it’s the key to staying ahead in a market where income is stretching over longer periods. Great insights from Matthew Gibbard and the LettsPay team—this is the kind of innovation the industry needs right now.
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