The rental market is big business. In the UK alone, there are over 2.6 million landlords, 20,000 letting agents and an estimated 10 million residential rental properties
For each of these properties, rents have risen by 11% in the last year, with average rental rates reaching over £1,000 per month.
The sheer size of the lettings industry is remarkable and makes the UK’s rental market a hotspot for economic activity — one that shows no sign of cooling. And yet, despite the potential of this industry, from a technology standpoint it remains largely ignored.
While we’ve all heard of the booming ‘PropTech’ scene, most of the disruptions and innovations being introduced are focused almost exclusively around buying and homeownership. In contrast, the rental market is being left behind.
For many of those involved, the rental experience is failing to deliver. Manual and paper-based processes, disjointed systems and complex legislation have all been standing in the way of great experiences. In 2022, that’s all starting to change.
Why the lettings industry is ready for a tech overhaul
In mid-June, the UK government proposed their Fairer Private Rented Sector whitepaper, which they’ve been calling “the biggest shake-up of the private rented sector in 30 years”. This landmark shift is a green light for tech innovators to readdress the missed opportunities of the rental sector and finally grant it the reforms it so rightly deserves.
While it’s true that property-focused tech solutions have come to the market, for many, PropTech encapsulates the development of smart buildings and have therefore strongly associated it with the commercial sector. For other innovators, their attention has been solely focused on the skyrocketing of house prices and accordingly, the development of applications for residential sales. Either way, innovators in PropTech have failed to tap into the needs of renters and all those involved in the lettings process.
But this is all changing. For the first time, RentTech is now being considered as a technology market in its own right — rather than as a subdivision of PropTech. These solutions are no longer an afterthought, but a thriving industry ripe for tech investment and innovation. The rental process is starting to experience the all-important digital transformation that has been experienced elsewhere, providing vital digitalised services to tenants, landlords and agents alike.
With this in mind, here are three of the biggest ways that RentTech is currently shaking up the lettings market:
The move to centralised platforms
For tenants, the biggest change being introduced by RentTech is that everything can now be centralised and achieved online via single, self-service platforms. From submitting references to making payments to signing tenancy agreements — everything can be done instantly, so there’s no longer a need to wait for important documents to arrive via email or the post.
When the time arrives for tenants to move into their new homes, these rental platforms can help ease the stress of getting set up in a new property by handling much of the additional admin such as council tax, bills, broadband etc.
Even after moving into the property, technology can help improve the renting experience. Forgetting to pay the rent or paying the incorrect amount can be a real pain, but with new technology, the need for human intervention is eliminated as people can set automatic reminders for payments and refunds can be dealt with instantly.
Similarly, all in one RentTech platforms can also benefit those who house share. Keeping track of shared bills can often be a cause of disputes but now there are apps that allow housemates to easily split any bills or household costs, therefore completely removing this headache.
Overhauling paper-based processes
For landlords, one of the biggest benefits being introduced by RentTech is the removal of paper-based processes. This is saving countless hours of administrative tasks – especially for those who own multiple properties.
By speeding up the whole pre-tenancy process, tenants can be fast-tracked to moving in, which is good news for landlords as it can reduce those costly and unwanted void periods.
The same is true for letting agents. According to data from Goodlord, the introduction of new technology is saving agents over three hours in administrative time for each successful property let.
Modernising the approach to referencing
For agents, the referencing procedures that are in place to verify an applicant and then validate their incomes and expenditure currently involves a lot of admin and manual checking. With the introduction of new technologies like facial recognition and Identity Document Validation Technology (IDVT), lettings agents can complete essential referencing documents much faster and easier.
Equally, these technologies can benefit tenants too, as right to rent checks and identity checks can be carried out by agents remotely, meaning tenants are spared the need to be checked in person.
RentTech is an area poised for growth with many fruitful opportunities still up for grabs. For so long it has been under-researched by PropTech innovators, resulting in many avenues for digital transformation that are yet to be explored. With the enormous number of tenants, landlords and agents involved in the lettings process, there is a huge potential audience for investors in this sector to capitalize on.
Ultimately, while the solutions that are now coming into play are already making significant improvements to all involved in the rental experience, there is still a long roadmap ahead for tech disruption, making now a great time to look beyond PropTech and invest in the new RentTech space.
About the Author
Donovan Frew is Chief Technology Officer at Goodlord. Goodlord is a cloud-based platform trusted by hundreds of agencies across the UK. We make renting easy through automated digital transactions, cutting agency time and spend by 50-75%. This enables agencies to focus on growing their business and providing a better service.
Featured image: ©Lucadp