These changes and people’s widespread adoption of neobanks, and other FinTech innovations, has also pressured big banks to create new consumer-friendly products to remain competitive against the likes of Monzo and Revolut, and ultimately improving the personal finance experience for consumers overall.
This begs the question, why can’t the rental market do the same? It’s time the industry provides an equally impressive, customer-centric experience for renters.
Navigating an old-fashioned system
The rental market is filled with legacy processes that have overstayed their welcome, including outdated sales structures, time-intensive referencing, and poor communication from landlords or managing agents. Yet, traditional estate agencies have, to date, opted not to disrupt and pivot this experience to provide a reliable, transparent, and flexible digital experience for today’s renters.
Typically, in the rental market, the landlord is the customer rather than the renter, meaning the renters' experience can often be sub-par and their needs are often overlooked in favour of an agent trying to get a bigger fee or rent price for the landlord and agent’s benefit. The renter then also has to repeat time-intensive referencing and employment checks they’ve likely done many times before, even if they have a perfect record, and ultimately move into a home where they have little choice in how they can customise or furnish it to make it feel homely.
It’s fair to say that there are many horror stories out there of renters paying a lot of money for a sub-par property but still finding themselves negotiating fee increases each year with a landlord who can be slow to listen to and fix ongoing problems.
What if this could be changed through technology to ensure all parties benefit? What if renters could enjoy the flexibility of renting alongside the benefits of home ownership, and without the maintenance costs?
Finding a solution in technology
For many, renting long-term has seemed like an unattractive option, being seen as difficult or poor value for money over time. However, renting provides a number of benefits, such as flexibility and convenience without the burden of maintenance costs that come along with buying, which may better suit someone who needs to move around regularly and not be tied to one location.
If we are to see a FinTech-like disruption in the rental sector, the market must overhaul this existing renting experience by making the renter the customer and changing the process entirely. If Monzo can change personal finance, Uber can revolutionise the way we book taxis, and Airbnb can modernise the short-term holiday letting sector, then the property industry can do the same for renting.
It’s something we are aiming to do with Residently - putting the renting lifecycle into one app and applying innovations from sectors like FinTech into the rental market.
The sector has to become digital-first. The pandemic forced every business online in some capacity, including estate agencies, so why go back to manual and admin-heavy processes in renting? Virtual viewings became the norm during lockdowns and with improved technology in virtual reality and LIDAR technology in the latest iPhones, it’s now possible to build a virtual 3D model of a property on your personal phone - so why should every viewing be done in person?
A digital-first virtual viewing saves time and cost in wasted viewings, and allows residents to get excited about a property online before they view it. Likewise, applying FinTech innovations into the referencing and payment process can reduce the need for paper-based contracts and referencing.
For instance, we work with world-leading payment providers such as Stripe to bring these innovations to a property world used to reconciling bank transfers manually against spreadsheets, and allow for renters to feel their payment experience is more like what they're used to on other everyday platforms.
These two developments alone can also help property managers access a wider pool of potential renters, allowing people currently overseas for instance to view and make an offer on a potential rental before they arrive in the city.
In overhauling this process, property managers can further enhance the customer experience in other areas too, for instance by allowing in-app choices for move-in dates, ensuring broadband and utilities can be set up in advance, creating options for furniture packages, offering cleaning services and more.
Once in the property, the renter could then use that same app to explore redecorating - offering the landlord a cost-effective upgrade and the renter a space that truly feels like home.
Homeliness is extremely important to renters, yet their needs often get overlooked. Consumers are out for a digital experience that acknowledges their perspective, something practical, personal and professional; a solution that offers flexibility and convenience with all-important customisations. It is now up to the rental market to listen to consumers’ priorities and innovate based on their needs.
This renter-first approach doesn’t have to come at a cost to the landlord either. For instance, at Residently we simply change the income streams and ensure that landlords have better, more stable tenants.
By using technology to put renters first, the economic model for property investors and owners is re-established - enabling them to maximise their yield with minimum hassle as all viewings, paperwork, maintenance and renewals are taken care of without any unexpected fees.
Ultimately, if there is to be FinTech-like disruption within the rental sector, the market must acknowledge that customer experience is crucial. The renter must be prioritised and offered a simpler, more customer-centric and supportive experience from day one of the rental lifecycle.
Shareq Husain, VP and UK General Manager at property management company Residently
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Turkeys voting for Xmas. Black Cabbies don't use Uber. Technology is 1 very important aspect for improving service delivery which we fully embrace. But Renting unlike FinTech can not be a fully digitised experience. McKinsey concluded Property Management is the least likely industry to be disrupted by Technology.
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