How can letting agents thrive in a growing rental market?
19 August 2019 2908 Views
With the recent introduction of the Tenant Fees Act – which bans upfront fees charged by letting agents and caps security and holding deposits – agents have faced their biggest challenge in years, perhaps even ever.
As the ban is expected to dent agents’ revenue, they have been encouraged to diversify, adapt, restructure, cut overheads, streamline processes and offer alternative services to offset the loss.
With tenant referencing one of the fees that agents can no longer charge for, the importance of partnering with an expert tenant referencing provider – offering agents a great service for a fair, reasonable price – is greater than ever.
Below, we outline how Rentshield Direct supports its agents, and how using our services could help to give you peace of mind in a challenging market.
We also analyse how the current rental market is in fact thriving and needs experienced, professional agents to ensure standards are kept high across the board.
A healthy, vibrant market
It was recently revealed that the number of older people renting in the UK is soaring, with Hamptons International finding that the number of British homes being rented to people aged 50-plus has increased by more than 60% since 2012.
Some 791,580 properties are currently rented by those aged over 50, an 8.2% increase from last year and 61% more than in 2012. During 2019 as a whole, people in this age group are predicted to pay £9.2 billion in rent.
People over the age of 50 now make up 15% of rented households, rising from 11% in 2012 and making ‘silver renters’ an increasingly large part of the private rented sector.
This follows on from other research in recent years which suggests that the number of middle-aged renters is booming, while the most recent English Housing Survey (2017-18) found that, between 2007-08 and 2017-18, the number of households with dependent children in the private rented sector grew by nearly 795,000.
And, of course, Generation Rent make up a significant chunk of the rental market – with data suggesting that more than half of adults aged 40 or under are expected to be renting privately by 2025. As this generation gets older, they are far more likely to be renting than owning a property.
Renting is already the largest tenure in London, and the second largest tenure in the UK, and research suggests that – based on current trends - tenants privately renting are anticipated to account for up to 50.7% of the housing market by 2039, outnumbering homeowners.
The UK currently has the fifth highest number of tenants out of all EU nations, with homeownership steadily failing over the years as the number of people renting privately surges.
In other words, the rental market is fast-growing and ripe for investment. Even in spite of the many challenges landlords and agents have faced over recent years, it’s still a very lucrative avenue for investment if carried out in the correct manner – with demand currently high and only going one way in the future.
Boosting income streams for agents
As mentioned above, the ban on tenant fees has brought a new set of challenges for agents – one of the biggest of which is replacing lost income. Here at Rentshield Direct we have come up with a number of possible new income streams agents can tap into, allowing you to provide tenants and landlords with new products or simply perfect your core business and become more efficient.
This includes our rent guarantee protection product – with a free reference check for every policy – as well as media packages which allow your tenants to access great deals upon moving into their new home, nil deposit schemes and insurance commission packages, which enable you to earn commission on every policy we sell to one of your customers.
You can find out more about commission packages, incentives and generating new revenue streams here.
Experience, trustworthiness and excellent customer service
As a company which has offered tenant referencing services since 2005, we have a keen understanding and insight into how the lettings sector operates, the importance of compliance, and the value of helping agents to offer a high-quality service to landlords and tenants.
We pride ourselves on offering excellent customer service to our clients – something backed up by our shortlisting for the Supplier of the Year award at The ESTAS 2019 and our 5-star Feefo trusted service award, which both clearly highlight our continued commitment and support to agents.
We work closely with our agents to ensure they stay compliant with regulatory measures, as well as assisting them in growing their businesses and offering an exceptional service to clients.
In order to tailor our offerings to agents, we offer three levels of tenant referencing to suit your timeframes, budget and the level of security needed.
It’s important to remember with tenant referencing that not all services are equal. There are a lot of products and offers out there – and we’ve witnessed agents opting for cheaper referencing products to cut costs – but do they really know what they are getting for this lower price? Is the level of check as comprehensive?
Good tenant referencing should offer agents and, in turn, landlords, total peace of mind that all the necessary checks are being carried out to ensure the right tenants are occupying their properties.
Here we explain what constitutes a real tenant reference, and how half-measures won’t offer agents and landlords the security and peace of mind they require.
Moreover, we offer agents assistance when it comes to dealing with the government’s Right to Rent checks – which have been controversial and challenging since being introduced in England in February 2016.
They require that landlords or their appointed letting agent must, by law, check that their tenants have the right to reside in the UK. Failure to do so is deemed a criminal offence.
Fortunately, our tool - Rentshield Verify – takes away any of the hassle or stress with regards to adhering to this legislation. It’s designed to help you carry out your checks with the reassurance that you’re looking at the right documents, storing them in a GDPR-compliant manner and carrying out any follow up checks or renewals on time.
Rentshield Direct is a trading name of Barbon Insurance Group Limited which is authorised and regulated by the Financial Conduct Authority for insurance distribution. Registered in England 3135797.
Rentshield Direct provide tenant referencing and specialist insurance products to the letting agents, tenants and landlords. We keep agents up to date with the latest industry insights and guide them through the changing landscape of the lettings sector.
Enquire about registering for an agent account here: https://www.rentshielddirect.com/index.cfm/letting/register-for-an-agent-account
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