If you take a broad look across the business landscape; all types of industries are building the bridges between digital and physical interactions, offering a new approach to how technology enhances the human element. But not every industry has found itself standing on the cutting edge of change; some are still lagging behind when it comes to technology-led initiatives. The UK property market – more specifically, the Private Rental Sector (PRS) – has shown that it is not afraid to embrace technology but is yet to universally adopt it in a way that improves and enhances the human service side. So, in such a fast-changing world where technology has led to so many dramatic improvements in efficiency and quality of service, why has it taken so long for the lettings market to ride the tsunami of change?
‘Digital Darwinism’ was first coined by Evan I. Schwartz in 1999 in order to explain the differences in business and the need to keep up-to-date with technology, information systems and responsiveness to data, communication, and customer/stakeholders expectations. The relevenancy of the evolution is clearly shown in ‘digital history’ when proptech (Property Technology) became prominent in the early 2000’s as property search/listing engines Rightmove (UK) and Trulia (US) began their relentless pursuit to disrupt the traditional real estate landscape.
Tech vs Humans
There are several reasons why the lettings industry has shown some reluctance to embrace the use of software, apps and other connective options (Internet of Things). Technology is seen as a way of reducing costs but also fees by removing much of the need for a physical agent – hence the rise of online agents where geographical location or proximity to the vendor or tenant is no longer a barrier to securing the instruction or let.
However, technological advancements are also blamed for having removed a major component of what many consider to be a vital part of an agent’s service – the human connection. With no real person to call, discuss, empathise or complain to; many feel that the need to drive down costs, streamline processes has been at the expense of customer relations with interactions replaced with automated and faceless ‘chatbot’ responses.
The Office for National Statistics (ONS) has analysed the jobs of 20 million people, and estimated that 7.4% are at high risk of automation. However, there are no estimates for the property industry, which could be less susceptible to job losses than other sectors like manufacturing.
Neil Cobbold, Chief Operating Officer of PayProp, has stated in a Property Reporter: blog – that “effective automation is key for agents to do more front-end functions” but that “PropTech can support this by freeing up capacity, allowing agents to focus on the more personal aspects of the rental process”.
So even though the emergence of Proptech and the fervour surrounding it has led to pushback in some quarters, it has also sparked a renewed interest and reliance on the human aspect in others as automating certain processes can both increase and enhance customer interactions and has the capacity to offer a more streamlined and financially viable lettings model.
The Compelling Need for Digital Technology
1.2m people are moving each year in the UK, creating a significant need to improve communications and drive down the time between all services involved in the tenancy process. Using technology to bridge the gap and improve efficiencies in the digital processing of tenancy agreements through to inventory management is just one of a number of opportunities to increase levels of customer service and delivery. In order to keep pace with other industries; real estate and lettings has to look towards end-to-end solutions where everything takes place under one umbrella, is auto-connected and seamlessly combines technology with the human element. Landlords and tenants can then benefit from access to better processes for managing and living in the property, while enjoying more peace of mind, realising reduced costs and hassle free renting.
The Future is Digital
Despite the obvious impacts of Covid-19; the need for digital technology has increased at an extraordinary and unprecedented pace. Whether it is there to supplement, augment, improve or drive efficiencies and timescales – there is no doubt that technology has become the next step in the evolutionary development for humans. Machine learning and artificial intelligence (AI) are seen as pivotal to using the data collected to inform how the lettings market operates and embraces the end-to-end tech solutions with an emphasis on humans as a key component in their must-have strategy.
Prop-Tech is Transforming the Lettings Industry
With so many technological solutions available to the lettings market; the rental process is now more cost and time efficient.
- Deposit protection – from lodgement to dispute – cases can be resolved quickly and efficiently online and under schemes 28 day response aim
- Tenancy agreements (AST) – issued and signed digitally removing the need to physically meet with prospective tenants
- Rent collection – network of banks, building societies and key stakeholders make the collection and payment of rent efficient and less prone to fraud
- Property maintenance and reporting – managers can see at a glance what needs maintenance, when certificates are due to be renewed and provide tenants with quick and responsive maintenance reporting and access emergency services
- Inventory, interim and check out reports – available online with evidence that supports both the landlord and tenant enabling faster dispute resolution, e-signatures, reducing the risks of damage to the property by comprehensive automated audit and information sharing trails
- Right to Rent and immigration checks – checks that relied on time consuming paper based applications are digital (until Aug 31st) speeding up the application and information capture process
And as pressure increases on landlords, thanks to increased activity and legislative changes, it is now more essential than ever to engage with tech solutions that not only speeds up the rental process, but provides vital compliance to what is a heavily regulated sector. Such efficiencies will enable landlords to remain within the law, whilst enabling them to focus on managing relationships, maximising occupancy and yields rather than getting embroiled in administrative tasks and risk falling foul of licencing or safety laws.
Evaluating Potential Tenants
When letting a property, there is a huge body of work that goes unseen with overheads for property professionals that can be significant. New, smart technologies can help to streamline, reduce costs and simplify many of these processes including:
- Tenant checks – taking them all online is key to managing increased workloads especially during peak periods such as the summer. Seamless online systems facilitate and integrate applications, speed up employment history, credit checks and even references – all with minimal human intervention. Smart algorithms and AI can quickly align landlords with suitable tenants, saving time, money whilst reducing the risk associated with renting out property.
- Mobile apps – property inspection apps and digital solutions help manage portfolios whether out in the field or sitting at the desktop. From rent management, property maintenance tasks list and certificate renewals, inventory reports, check out and interim inspections – apps are now the lifeblood of the modern agent and service provider. With increased scrutiny around the management of the rental property – the Homes Act seeks to improve the quality of rental stock and minimise risks to tenants by collecting and documenting vital evidence with detailed inventory reports and Fitness for Human Habitation risk assessments all captured in detailed reports underpinned with pictures and video. With property maintenance supporting the drive towards increased safety – it’s hard to imagine life before and without apps!
- Virtual tours and live inspections – videos of properties allow landlords, letting agents, property managers and renters to view the rental property remotely, 24/7 and from anywhere in the world. Virtual tours can provide a real time understanding of the property for the tenant when it comes to deciding on their onward move whilst live inspections have a tangible benefit for the landlord from a maintenance perspective, providing instant evidence and proof of issues and damage whilst maintaining the privacy and right to quiet enjoyment of the property by the tenant.
An Unstoppable Force
Rental demographics in the UK have changed significantly both in recent years and certainly over the last 18 months. There are now no longer ‘A typical’ tenants – more a mixture of ages, backgrounds, needs and wants from short to extended rental periods and more choice over variable space especially as people work from home. There has been a distinct shift towards houses and more outside space than the apartment type living many from the city have sought to move away from during the pandemic.
The proportion of 35 to 54-year-olds who live as private tenants has more than doubled in the last 10-15 years. Equally the number of renters has increased – more than a fifth of the population now live in rented private property in the UK. With the scale of regulatory changes together with the change in renter demographics; the lettings industry is being forced as well as encouraged to innovate as the number of private renters is set to increase to over 6 million in the next few years.
As designers with clear aims to improve and make the lettings sector more efficient – Inventory Base is a software solution at the forefront of this technological revolution, providing an end-to-end solution for property reports and management to the lettings market. And this is only the beginning – for those willing to embrace the opportunities the rewards are, in turn, enabling and innovating the developments that will further invigorate the sector.
Digital technology is the next step in our evolutionary march towards a future full of digital opportunities and possibilities. Using Darwin’s theory of evolution as an amplifier for modern day innovations – any accumulation of wants, needs and differences will almost inevitably provide the springboard for the design of novel technologies to improve and enhance every aspect of our lives resulting in the inevitable evolution of our businesses and the lettings sector.
The next question that will be posed is who is the fittest and who is likely to survive the continued digital transformation? Food for thought….