Lettings crisis: what does this mean for UK letting agents

Listings are down, mortgage rates are high, regulations are becoming even more complex and already stretched tenants are feeling the effects of the market crisis once again. The start of this year has remained unsettling for many landlords and lettings agencies, who have had their fair share of turmoil as the UK property market has continued to remain unsettled.

UK downturns have increased rental demand

According to Propertymark’s data the demand for rental properties has risen by 57% since 2018, which will come as no surprise as we’ve seen mortgage rates rise. Many buyers who could once afford a band of properties are now being priced out. Couple this with the fall in UK mortgage approvals from Banks at 20%, there is no wonder many buyers are continuing to rent. The prospective reforms to the PRS will also undoubtedly effect the supply of rental properties further.

So what does this mean for lettings agents?

Agents are going to need to work smarter and stay proactive if they want to win more listings and retain landlords. New regulations surrounding EPC ratings are going to be another hit to Landlords, who are already facing rigorous ICR calculations and higher interest rates. It is vital that agents offer landlords some security by effectively managing their properties helping to prevent them from jumping ship.

Top tips for growing your letting agency in 2023

Here is a list of how agencies can best continue to grow their lettings business this year:

• With the need for lets soaring, agents have a monopoly of prospective tenants eagerly waiting to rent properties. Make sure your lettings software is integrated with the best tenant referencing PropTech. Good quality tenants often result in property owners reaping the benefits of long-standing tenants.
• Build strong relationships with Landlords that give your agency the edge. Estate agents can do this by keeping in contact with Landlords on a more regular basis. Friendly check ins, fast response times, as well as providing streamlined tenant and Landlord experiences can set your agency aside from your competition.
• Provide additional services that speed up processes. Modern property management solutions like ReziPM also offer client accounting software and auto-banking systems allowing agents to better manage client finances, pay contractors and reconcile accounts. Consumers now expect money in and money out to be processed in real time. If you are still using traditional methods to complete these, you may see your agency being left behind.
• Offering competitive pricing and fee structures is now key to winning more rental listings.
• Know your area. A KPI for your agency over another could boil down to agent expertise. Remaining up to date on the local rental market, key rental areas, the best schools, bus routes, rental prices and tenant preferences can give you the winning edge.
• Be transparent. Landlords want to feel confident that their property portfolio is being managed effectively. Agents should be transparent, notifying Landlords and tenants of any changes to fees, charges and legislation including accurate financial reports.
• Improve marketing efforts. With the vast majority of buyers viewing properties through digital channels, it is key that agents include a strong marketing strategy to win new business in 2023. Creating video content can be key to obtaining more social media interactions. Encourage your team to reshare listings posted to the company’s social media channels as this will widen the outreach and deliver more engagement.

Experienced Landlords will ride the wave

Overall, estate agents looking to avoid a downturn in lettings listings need to strengthen their current landlord relationships by providing excellent customer service, whilst looking at their internal processes ensuring to maximize resource. Agents may initially see a number of newer Landlords to the market looking to sell as their revenue is squeezed, but more experienced Landlords will once again ride the wave and reap the fruits of their labour when the market becomes more settled.

Our conclusion

One of the biggest opportunities being overlooked by many agencies has to be the leveraging of PropTech solutions that propel customer service and better manage team performance. Agency owners need to quickly evaluate their sales, lettings and property management software capabilities for winning new business and equipping their team with the best tools available. Those who look to become early adopters of technology advancements will quickly see themselves winning an edge over their competition.

Learn how Rezi Sales, lettings and Property Management software can give your agency the edge today or contact our sales team to book a demo.