An online lettings firm is aiming to use property technology to take the stress out of renting, by allowing landlords to find tenants and renters to find properties. OpenRent, which was founded in 2012, has raised £4.4 million in funding from Global Founders Capital, the VC arm of Rocket Internet, on top of a £1 million equity investment from Northern & Shell Ventures two years ago.
Co-founder of OpenRent, Adam Hyslop, explained that the company’s success is based on being able to save both landlords and tenants considerable sums in fees, while also investing in technology to provide a better service. The London-based company, which has properties across the UK, was borne from a desire to take the frustration out of renting for both landlords and tenants. A lot of time could be wasting going through lists, chasing up agents or making phone calls. The online site makes things more efficient – with minimal charges.
Landlords can choose from either the free service or a £49 service for advertising and tenancy set-ups. Tenants pay a one-off fee of £20 for references. The website claims that it takes an average of nine days from when a property is advertised to being let with an average saving of £2,860 per landlord. Once a prospective tenant is interested in a property, OpenRent sends the landlord a SMS message and email so you can get in touch, meet the ones you like and show them around your property.
Online agents are gaining in popularity, particularly with millennials who are happy to conduct all their business by phone or tablet. They can view a lot of property from their phone or laptop, check out the area using Google Maps and RightMove, and find out a lot of information, before even setting foot in the neighbourhood. The fees are also much lower than through a traditional letting agent, because they don’t need a physical presence on the high street and they don’t use traditional advertising media such as local newspapers, which all helps to keep down the costs.
Traditional estate agents are increasingly coming under threat from online prop tech firms and either need to adapt or risk fading away. Another online estate agency which is causing problems for traditional agents is Purplebricks which does not have expensive physical offices, but instead employs freelance property advisers to contact sellers. Purplebricks now controls about 65% of the online market. Online is expected to take over a larger slice of the property market in the coming years because it’s available 24/7, it’s easy to use and cheap, if not free.