The lettings market is at its busiest in the summer. This year, with rents reaching record highs and the end of lockdown restrictions, we can expect a bigger upswell in demand than any seen before. Throw in the end of the stamp duty holiday and a slowing sales market, and agents will be keen to benefit from a bumper summer for lettings.
Rental market in great shape
All signs and statistics from the last few months point towards a booming lettings market this summer. The Goodlord rental index highlights the growth in activity in summer months:
July 2020 saw a peak in average monthly rent that was 13% higher than in February of the same year. 2021 is no different with a 7% increase already recorded between November and June. We see a similar story from Hometrack that has rents at record highs in many areas of the country. Rental growth hit a 10-year high in March in the North East, South West, East Midlands and in Wales, whilst growth was recorded in every area outside of London.
Whilst inner London is a more challenging market, the end of lockdown and resulting increase in leisure and lifestyle opportunities available brings value back to residents. Research by Knight Frank showed that tenant viewings across London and the Home Counties were 82% higher in June 2021 compared to June 2019.
Winning more instructions in a challenging lettings market
Whilst the market is growing, it’s still competitive. Multiple agencies operating in the same area and the same high-street make it difficult for agents to differentiate. Landlords are cost-driven, often demanding great service for a small fee from competing agents. Yet agents can’t rely on cost cutting to help them grow. To win more instructions they need an offer that makes them stand out from the pack.
This is the view of industry commentator Paul Shamplina. The founder of Landlord Action, industry commentator and host of Channel 5’s “Nightmare Tenants, Slum Landlords”, Paul recently advised landlords to choose ‘the right agent’ over self-management, precisely because of the challenges of regulations:
“There’s been 47 changes to regulation and law in the UK during Covid and for the small portfolio landlords now everything has changed massively,” he says. “I believe it’s essential that they have a letting agent on their side albeit the correct agent by picking the right one, which is very important.”
With property licensing regulations changing, on average, every 8 days across the country, even the most experienced agent can find it hard to keep up. Yet when it comes to winning instructions, this is a major opportunity. With fines of up to £30,000 for breaching regulations, even the most cost-driven landlord can be offered superb value by an agent that takes away this risk.
Map of London’s property licensing landscape
Harnessing technology has made agents into instant experts, helping them stand out from the crowd. As Ellie Donaghy, Head of Lettings at Andrews Property Group, describes the winning formula for succeeding in a competitive rental lettings market is to reduce risk, untangle complexity for landlords and display real market expertise.
“Kamma has helped us stand out from other agencies because we’ve been able to be more prepared [in dealing with regulatory compliance]… We’ve been able to stand out purely by being the best at compliance in our area.”
Finding new revenue at every stage of the lettings cycle
The best agents in the industry also seek out new opportunities beyond instruction. City Relay recently increased the value of their customer offer and opened up a new revenue stream with a licence application service. Identifying where new schemes impacted their landlords worked as lead-generation, automatically identifying a customer pain point and allowing them to offer a solution. Not only does this present new growth opportunities for agents, it also offers a retention benefit: a licence held for 5 years on behalf of a landlord supports a stronger relationship than a 12 month tenancy agreement. As Alice Dunn, Head of Property Management at City Relay explained:
“Kamma application has been a great opportunity for us to create more revenue [… ] where other agents leave it [licensing applications] to their landlords, we can take control and help our landlords.”
With the return of landlords to the high street and a bumper summer of lettings ahead, it is those agents that combine great service and salesmanship with an ability to solve new problems that will get ahead of the competition. The challenges of dealing with new regulations can leave many agents without enough time to focus on winning business. Those armed with the right technology, reports and solutions will win more instructions, set up new revenue streams and build stronger relationships with their landlords.
Hear directly from Ellie Donaghy, Head of Lettings at Andrews Property Group on how they have used Kamma to explore new revenue opportunities and stand out from the competition.
Contact us or book a demo now to understand how Kamma can solve property licensing for you.
