There are rumbles that more Material Information may disturb any equilibrium in an already fractious market, while moving agents further away from their stock-in-trade of sales and negotiation. Anti-money laundering laws have already led some agents to question whether they actually work for the National Crime Agency, while others feel like they’re doing the job of Border Force when completing Right to Rent checks. Are agents now being pushed too far into conveyancing territory?

Carl Brignell at Elite Conveyancing thinks so and is full of sympathy. “Having read through The National Trading Standards Estate and Letting Agency Team (NTSELAT) requirements, I have absolute sympathy. Trading Standards is effectively asking agents to report on technicalities for which they have no experience, and without any provision for training or a guiding regulator. This is akin to asking a dentist to report on a patient’s eyesight!”

Trading Standards is effectively asking agents to report on technicalities for which they have no experience.”

“The sad irony is that Material Information is a misguided quest and is likely to result in a significant increase in misinformation. It also raises the question of who is held liable for mistakes,” adds Carl, who believes below-average fall-through rates can be achieved with the due diligence of a proficient mortgage broker and a good agent correctly pricing a property.

The general consensus, however, is that more upfront information, together with revised expectations of what happens and when, will positively affect conveyancers, agents and movers. Peter Joseph at The Moving Hub says those involved are not being asked to produce anything new but are merely being asked to produce it earlier in the process. “If a conveyancer is competent, the Material Information required would emerge during the conveyancing process anyway. So let’s be upfront about it.”

If a conveyancer is competent, the Material Information required would emerge during the conveyancing process anyway.”

Upfront adoption is already here

Many conveyancers are already on-board with the idea of front loading. Vicky Quinn- Campbell at Simply Conveyancing recognises that the more information a vendor gives before the marketing of a property starts, the more streamlined the sales process will be. She also says that information should be digitised so it can be shared in real time.

Our clients are asked to fill in a Property Information Form early in the process which gives us important information about the sale and provides the vendor with guidance.”

Like many firms, Simply Conveyancing has already taken a stand to gather information from vendors as quickly as possible. “Our clients are asked to fill in a Property Information Form early in the process,” comments Vicky. “This gives us important information about the sale and provides the vendor with guidance on the kind of documents that will be required during the transaction.” Vicky adds that getting started early gives the vendor more time to find the warranties, guarantees and the paperwork vendors “have a habit of putting somewhere ‘safe’ and then forget where that ‘safe’ place is.”

Forget forms, think digital

Maria Harris, the Chair of the Open Property Data Association and a director of Digital Cat Consultancy Ltd, has been working closely with HBSG and shares Vicky’s views. “Ideally, everyone should stop thinking, talking and working with forms – it’s one of the biggest barriers to digitising the transactional process. To truly reform home buying and selling, everyone needs to move to a data-led and digital way of working.”

The HBSG wants to make digital property logbooks compulsory for sellers.”

The digital nirvana will be for data, such as titles, deeds, searches and EPC ratings, to be collected then stored in a FAIR (findable, accessible, interoperable, and reusable) format via the Property Data Trust Framework. This would become the global standard for data and provide the ‘real time’ access for all stakeholders that Vicky craves. On the matter of warranties, guarantees and other documents that sellers are asked to provide – the ones that are often lost, misfiled or stuffed in a kitchen drawer – the HBSG wants to make digital property logbooks (ongoing information about a property) compulsory for sellers, so information is instantly available.

The work of The Residential Logbook Association (RLBA) is admirable and is supported by the Department for Levelling Up, Housing and Communities. Described as a ‘digital property companion’, a logbook provided by a RLBA member will not only have useful, relevant information about a home in a secure and standardised way, it will also have a copy of the title deeds and any documents referred to in the title document.

The HBSG also wants a greater adoption of property packs (the collation of upfront information prior to a sale), which would see vendors complete IDV and supply BASPI/ TA6-compliant information early in the sales process to reduce duplication and doubling up.

Changing the order of events

Agents might question their role in any future information gathering, especially as they adjust to obtaining Material Information Parts A, B and C, so now is a good time to talk about timing. The idea is not to make estate agents work any harder. The HBSG’s aim is to shift the emphasis to the pre-marketing stage, involving conveyancers much earlier, and finding new time and cost efficiencies between memorandum of sales and completion.

One of the HBSG’s key recommendations is for sellers to instruct a conveyancer before they contact an agent – or at least on day one of marketing. The conveyancer would collate all the legally-required paperwork, would ask the vendors to supply mandated information and would assimilate aspects, including the BASPI, property log book and property pack, prior to an agent’s instruction.

The result would be a complete picture of a property for sale and the compilation of all the Material Information required, without the agent having to gather technical information.

Kate Faulkner OBE, the chair of the HBSG, says that when agents insist their clients complete property logbooks, fill in property packs and instruct a solicitor before they take on the property, the administrative burden is reduced and the resulting sale is speedy and secure.

“Being an agent isn’t easy and neither is making a profit,” comments Kate. “The two big problems for agents at the moment are the length of time it takes to sell a property and the 30% fall throughs. Both are costing agents dearly. One of the causes of these issues is not having enough information upfront, which can lead to overpricing.” Overpricing is one of the concerns expressed by Carl. Often a dwelling’s true value is only found out several weeks after a property has had an offer accepted, usually when something detrimental is uncovered by the searches or in the title deeds.

The two big problems for agents at the moment are the length of time it takes to sell a property and the 30% fall throughs. One of the causes is not having enough information upfront.”

Another issue that can derail a transaction further down the line – and can be avoided by having upfront information available – is a lease. “The information provided by even good agents is rarely enough or correct,” adds Kate. “Rushing to get a property to market without all the answers an agent is required to have – lease length, service charges, ground rent and sinking funds, for example – can end in disaster, especially if this information isn’t understood by the buyers.”

A new money mindset is needed

And now for the prickly point of Pounds Sterling and who will pay conveyancers for their advance work if a new way of buying and selling is adopted. We have to add into the mix that more upfront information may put buyers off and jeopardise the ‘no completion, no fee’ offering of some legal firms. Someone has to cover the conveyancing expense bearing in mind a sale may fail to materialise.

It was a question that hung over the HIP but Glynis Frew at The Property Franchise Group has an opinion on the matter. “What’s really interesting is the push-back that we get that the seller ‘will not pay’ and yet anyone wanting to rent their property pays for an EPC (approx £75), a Gas Safety Certificate (approx £150) and an electrical test report (approx £250), plus the fee to market and find a tenant. Letting agents have no qualms about telling a landlord to commission and pay for these documents.”

Now it’s more than just talking. We had a meeting recently where different protagonists in the industry exchanged examples of how they are making changes happen.”

Glynis’s thoughts tap into a wider mind shift that needs to take place – one where sellers have to be super-serious about their intent to sell. If a vendor is committed to selling, surely they will be invested enough to pay a conveyancer to start work before they instruct an agent?

Equilibrium

We’re returning to the earlier point of disturbing any equilibrium in the current market. After all, the proposals require wholesale changes across numerous industries and also a buy-in from the general public. Will upfront fees put sellers off? “

If a good conveyancer or agent explains to vendors what they are paying for before they market their home and how it will help them, it shouldn’t deter sellers,” comments Kate. She adds that those who are put off are perhaps not the clients an agent needs. “Upfront fees means agents get committed sellers.”

We only have to look to Scotland to see that upfront information can change the buying and selling process for the better. “When a Home Report became a legal requirement in Scotland, the view was people wouldn’t put their properties on the market,” says Kate. “In reality, it didn’t have any negative effects.”

On the contrary. Data obtained by HBSG found transaction times are 4 weeks quicker in Scotland, on average, and the average fall-through rates are 66% less than England and Wales. The upfront cost? RICS puts the average price of a Scottish Home Report at between £585 and £820.

It’s now, as more conveyancers, agents, lenders and providers buy into the HSBG’s recommendations that more objective – and creative – conversations around cost can take place. It’s possible that some agents will be able to absorb the expense of upfront information so it’s a carrot to dangle in front of sellers. Others may explore deferred payments options, as seen in Scotland, where the Home Report can be paid for upon completion or withdrawal. Perhaps it’s as simple as telling sellers they must pay for upfront information and the start, rather than at the end. After all, it won’t be a new expense but a cost that comes earlier.

Kate agrees that there are various ways of covering costs.” There are agents working closely with legal companies to provide the information for free – they’re finding it saves both parties enough time and hassle that it pays for itself. Other agents are buying in property packs to provide the information – they find it reduces time to sell and fall throughs, again, paying for itself.”

Time for progress, not procrastination

There is no question that those involved with the HBSG – the list is impressive and extensive – want change but there’s an elephant in the room. How can we stop the repeated discussions regarding reforms from internalising further? How can we take the discussions away from trade platforms and out into the real world? How can we draw the consumer into the conversation to such a degree that they demand a streamlined, simple conveyancing process?

“Now, it’s more than just talking,” comments Glynis. “We had a meeting recently where different protagonists in the industry exchanged examples of how they are actually making changes happen. The focus is on different agents, conveyancers and service providers working together to enact change. Once we get a swell of activity, this will provide the platform to educate the consumer on what is possible.”

The consumer is at the heart of the HBSG’s proposals. Its discussion paper repeatedly calls for consistent information to be shared with the general public, requesting the Government and the media to communicate changes and revised expectations. It’s a sensible approach as success stems from awareness and a degree of opt in.

It is suggested a leaf be taken out of the lettings book, where the ‘How to Rent’ guide has become the legislative backbone of compliant tenancies. The HBSG wants revised ‘How to Sell’ and ‘How to Buy’ guides to be mandated in the same way as their renting equivalent, and the contents to clearly state what is expected of buyers and sellers. The guides – sent to home movers at the initial point of contact with an agent –should also outline what home movers should expect from the professionals involved.

Regulating agents for mass adoption

Defining the service expected from agents goes hand-in-hand with the HBSG’s key proposal for the regulation of property agents. It feels regulation would ensure all agents make the changes required to improve the transactional process, compelling them to comply with any new legislation and issue mandated information.

With the guides issued, home movers would also be prepared for the checks and verification ahead, such as making it explicit that financial prequalification will take place before a purchaser can view properties and make an offer. There are also notes on a move towards one digital ID certificate, a greater adoption of open banking when it comes to AML, risk assessment and proof of funds, and recommendations on the release of mortgage funds so moves are concluded by 13:00 on completion day.

Everything mentioned above is possible and much of it is already taking place. Now the HBSG wants even more professionals involved in the transactional process to follow its roadmap, test, pilot and feed back its findings.

The tools are available – the BASPI, property packs, property logbooks and conveyancers who are onboard. What’s needed are more agents willing to stick their head above the parapet and only take on sellers who are committed to upfront information and who have been financially prequalified.

Collective change from within

There’s not going to be a sweeping law that alters every aspect of buying and selling. Instead, transformation will come from increasing amounts of mandated information, self-initiative, a collaborative desire for change within the industry, a willingness to adopt fresh ways of operation and a commitment to educating consumers.

In the end, the difference will be agents who can offer faster completion times and lower fall-through rates, versus those who over-promise, under-deliver and lose the trust of the home mover.

The post Who’s making the moves in conveyancing? appeared first on The Negotiator.

Because of the layers of complexity, some bigger agents outsource the whole process to a specialist inventory provider – more on that later. But for those agents who prefer to do it themselves, technology has gone a long way to making life much, much easier.

User-friendly app

Inventory Hive is a relative newcomer, but has made a big impact on the market with its user-friendly app that takes a lot of the pain out of the process. “When they set the property up on Inventory Hive they can choose an inventory template,” says marketing manager Mitch Handley. “So if they know it’s an unfurnished house in a good condition it will pre-populate the rooms – it saves the agent having to manually add each room and each item in the report.” The agent can then tweak the report as they go round.

“Inventory Hive already provides some descriptions they might want to use – for example, the kitchen is clean and tidy, with a neutral smell. But they can type in the box or voice dictate or choose from a drop-down list,” adds Handley.

Inventory Hive has made a big impact with its user-friendly app.

You can also clone items at the click of a button – for example, the condition of the radiators – or even whole rooms. Photos are taken through the app and embedded in the report.

One feature of Inventory Hive is the ability to use 360-degree camera technology to capture a room in one hit, making it easy to compare before and after pictures at check-out.

There is also integration with Fixflo so that if any maintenance issues are raised, they can be dealt with at the click of a button.

The report is then emailed to the tenant who has the opportunity to provide feedback on it when they move in, reducing the potential for disputes.

“If the agent is giving the tenant the opportunity to provide feedback at check-in they can’t really dispute issues at checkout because they have had that opportunity to raise an issue,” explains Handley.

“Creating property inspection reports isn’t a fun job for a letting agent, so we try to make it as simple as possible through the app.

“Usability is really simple, and it’s not overcomplicated. There are less buttons to click, it’s easy on the eye, and the interface on the app is exactly the same as the desktop site. We offer a lot of support and training to all our users. We ensure we hold their hand to make sure they are using the software correctly.”

Live dashboard

Inventory Base is a big player in this space, and enables agents to produce professional inventories, check-ins, check-outs, interim inspections, building inspections and risk assessments. A live dashboard keeps you informed and compliant with historical audit trails and instant notifications. Pre-configured templates can be accessed at the click of a button, and you can complete reports at the property using the user-friendly mobile app, which supports audio recording and speech-to- text. There is also a transcription service, if needed.

The app and website also support 360-degree photos and videos. Tenants can also do their own remote interim inspections, working with an agent in the office, avoiding the need for site visits.

Inventory Base’s range of functions carried out digitally.

Inventory Base allows you to schedule tasks such as EICR and gas safety checks with contractors. In fact, one feature that makes it stand out from the crowd is its marketplace solution for dealing with contractors.

“The providers will get an email allowing them to bid on the job; the agent can see the rating, make sure they are qualified and, say, RICS registered,” explains Inventory Base operations director, Sián Hemming-Metcalfe.

You can manage your resources and your suppliers – the key thing is, it’s about making that data share and connection frictionless. Sián Hemming-Metcalfe, Inventory Base.

“The money sits in an escrow account so the supplier knows they are going to get paid promptly. Sometimes they may have to wait 90 days – our marketplace solves that problem. Once the job is done correctly, the money drops into their wallet. Equally, if something goes wrong, there is the ability to recourse through a complaint process.”

Inventory Base works seamlessly with CRM systems such as Reapit, and contractor software like Fixflo.

“You can manage your resources and your suppliers – the key thing is it’s about making that data share and connection frictionless,” adds Hemming-Metcalfe.

Of course, despite these labour-saving apps, some agents prefer to outsource inventories and property inspections, allowing them to focus on the job in hand.

For those agents that prefer to outsource the inspection process, there are several options.

Savvy to outsource

Assist Inventories was started in 2014 by former letting agent Charlie Saunders, so he knows what it’s like for a harassed agency staff. “A few agents will try to do reports themselves, but the majority, particularly the savvy ones, will outsource it,” he says. “The main reason it is done by a third party is because if the agent is managing the property and there is a dispute with the deposit, it’s quite hard for the agent to argue with the tenant – if the agent has carried out the report they can be accused of being biased.”

A few agents will try to do reports themselves, but the majority, the savvy ones, will outsource it – if the agent has carried out the report they can be accused of being biased. Charlie Saunders Director, Assist Inventories.

The process is simple: when the agent finds a tenant, they will book an inventory check-in report. The clerk will get keys from agent, go to the property, take all the pictures, make a note of the condition and all the defects, meet the tenant and check them into the property. At check-out, the clerk meets the tenant at property, they hand over the keys and the clerk completes a check-out report.

“Because I used to own a letting agency I know everything that needs to be contained within the report,” says Saunders. “That knowledge is passed down to the office staff, we spend time training clerks to make sure the correct evidence is done in the correct order and the correct format, there are enough photos on there, and so on.

“That creates more work for us and more costs, so we are slightly more expensive than some, but it’s not worth the paper it’s written on if it’s not done properly and we have won multiple awards for what we have done.

Assist Inventories offers a full money-back guarantee on inspections. “That really helps cement what we are saying in that our reports are the best. Because we are not the cheapest, if a report is £20-£30 cheaper with another company but it doesn’t hold the evidence to get £100 off the deposit, it is a false economy.”

AI and inventories

One interesting future development in the inventory and property report world will be the use of artificial intelligence (AI).

While not quite there yet, most of our experts agree it will have a role to play in future.

“I can 100% see that will be happening in the future,” says Tomlinson of No Letting Go. “Obviously you are going to need someone there to take the pictures and there are always those things that are not so easy to identify – sometimes tenants try to hide things – but you could certainly cut down the amount of time it takes to do an inventory with AI. You can do more jobs, so it’s more cost-effective for everybody.”

Mitch Handley of Inventory Hive agrees. “Potentially AI could scan the room and pick up the contents rather than you adding in all the items manually – the TV, the fireplace, lightbulbs. The thing with AI will be making sure it is as accurate as possible because obviously it’s an important document.”

Sián Hemming-Metcalfe says Inventory Base is already looking at AI. “With a standard room, you could draw out the descriptions and produce a report from that – it’s totally do-able and something we are already looking at. It makes sense – there are things you can automate, you can streamline, you can make it more efficient for the user and for the buyer. She warns, however, that it is unlikely ever to be a complete solution, as it would be unable to pick up the nuances – looking inside an oven, or finding something a tenant was trying to hide.

Even if AI is a few years off yet when it comes to inventories, as with most things to do with the property world these days, technology is providing solutions to make lives easier and less stressful for agents.

Whether you do your own property reports and outsource them, pretty much everything now can be done at the click of a button.

National scale operator

No Letting Go is a national inventory provider, with 85 offices across the country. It is a franchised operation, but controlled and monitored by head office so the look and feel is always the same. “It’s incredibly time-consuming doing an inventory and check-out,” says head of operations, Justine Tomlinson. “It’s easy to miss things – our guys are experts in it, and are trained, and are doing it day in, day out.

If a dispute goes to adjudication, it is looked on more favourably if the inspection has been done by an independent company rather than by the agent themselves. Justine Tomlinson, Head of Operations, NoLettingGo.

“Also, if a dispute goes to adjudication, it is looked on more favourably if the inspection has been done by an independent company rather than by the agent themselves.

“All our inspectors are highly trained and monitored by head office and we take responsibility for anything that goes wrong.”

Like Assist Inventories, No Letting Go also offers a money-back guarantee to agents. “Providing we have done the inventory and checkout, we guarantee that report will stand up if it goes to arbitration, and if not we will pay out any losses,” says Tomlinson.

Agents are set up on the company portal and there is full online tracking from the moment the job is on the system. They can see the job been booked in, when the job is being done, and when it has been completed.

“When they are setting up the tenancy they can order the inventory at the same time,” she adds. “They are dealing with so many different suppliers – obviously the holy grail now is to be able to access all the suppliers via one system. That’s a big focus for us at the moment, making sure we are integrated with as many systems as possible to cut down on double-data entry for agents.”

Another issue that No Letting Go handles is key management. “We will pick up and return the key – sometimes we are asked to hold the keys for a short period of time,” explains Tomlinson. “Keys are the problems of the industry really, locating keys and identifying where keys are. So quite often agents will ask us to keep hold of the keys between a check-out and an inventory.”

One provider with a unique solution to the key management challenge is KeyZapp – see panel.

KeyZapp – The key to good service KeyZapp is a highly innovative standalone product that allows agents to keep track of property keys – whether it be for sales or lettings. Managing keys can be a nightmare for agents, so KeyZapp came up with a simple high-tech solution in the shape of a ‘smart’ key fob. Each fob is printed with a QR code and also contains a ‘near-field communication’, or NFC chip – the same one that allows you to remotely swipe your phone at a supermarket till.

Each set of keys has its own unique key fob that can be identified using either a specialist reader or your own smartphone.

“If an agent finds a random set of keys on their desk they can just touch the reader and it will tell them which property they belong to, whether they are coming back in or going out, or whether it is a master set or the tenant’s set,” explains director Tim Hill. “It also avoids giving tenants the wrong set.”

If an agent finds a random set of keys on their desk they can just touch the reader and it will tell them which property they belong to. Tim Hill Director, KeyZapp.

The system works with phones, too – if you hold fob to an iPhone, you don’t need to install an app, as long as KeyZapp knows who you are, you can identify the property address from your phone.

One useful security feature is that if a set of keys is lost, and found by someone who touches it with their phone, or tries to scan in the QR code, because they are not a recognised user, a form pops up that says ‘Have you found this key?’ that allows them to report the key as having been found.

With property sales, KeyZapp allows you to track the keys that staff are taking in and out of the office. “The common thing there is you take out five keys in the morning, bring a bunch of keys back, and you don’t realise you’re only brought four back because one as fallen into your footwell, or whatever,” says Hill. “If a key hasn’t been brought back you are alerted that the key isn’t where it is supposed to be.”

KeyZapp is surprisingly cheap at 25p per property per month, with fobs costing just £1 and readers £40.

The post Check this out appeared first on The Negotiator.

William Reeve at Goodlord says we’re definitely at a point where the vast majority of agencies have at least experimented with software; “Some letting agents were very quick to see the benefits that technology can bring, whilst others have come round to the idea more slowly.” The use of Goodlord’s software is testament to greater adoption. “Demand for our services has increased year-on-year,” says William. “Once teams start using a platform like Goodlord, they soon realise how much time and admin stress they save, and how much bandwidth they gain to focus on clients and the wider health of their business.”

Once teams start using a platform like Goodlord, they soon realise how much time and admin stress they save, and how much bandwidth they gain to focus on clients. William Reeve, CEO, Goodlord.

Goodlord – time and stress saver

Apps are one of the easiest pieces of proptech to understand. From online banking and Spotify to parking and fitness trackers, we’re comfortable with using a variety of third-party apps to streamline our lives. The same should be true in property – especially in lettings.

Today’s software apps have been designed to be user friendly, so the steep learning curve of the past is now the gentlest of inclines. Agents have rich pickings too. From all-encompassing platforms that automate almost every important – and laborious – task, to stand-alone services that allow staff to cherry pick what jobs are more digitised, agents can retain as much control as they like.

Time savings that can’t be ignored

So, just how much time can be saved when using apps? For agents that jump in with both feet and subscribe to Goodlord’s end-to-end lettings platform, a typical agency will benefit from automating 37 compliance steps and will remove 60 steps of duplication on each and every tenancy. William says this reduction in admin can triple the number of tenancy applications that can be processed with the same number of employees.

The Lettings Hub – another end-to-end lettings platform – prefers to express its benefits with percentages. It says by automating 60 per cent of repetitive tasks it can shave an average of 60 per cent off the time required for tenancy set up. “By automating tasks – including tenant referencing, Government-approved digital Right to Rent checks, the creation and distribution of tenancy agreements, and digital signatures – agents can prioritise building client relationships and expanding their business, while significantly reducing administrative burdens,” comments The Lettings Hub’s Heidi Shackell. Automatically more efficient, Heidi also highlights how its BOX software can enhance accuracy, especially regarding compliance. “Manual processes are prone to human error, potentially leading to legal and financial complications. BOX’s functions – such as the automatic issuing of mandatory documents – reduces the risk.”

Manual processes are prone to human error, potentially leading to legal and financial complications. BOX’s functions such as issuing mandatory documents – reduce the risk. Heidi Shackell, MD, The Lettings Hub.

Yielding to automation is something agents have grappled with in the past, as it acknowledges that tech can be more accurate, competent and efficient than the human touch. John Antill at Brightchecker thinks people together with proptech is the best combination. “As humans we naturally don’t like change and it takes time to transition to a new way of doing things. This applies to agents who are happy with a manual process. The best property apps allow agents to conduct inspections more efficiently than they ever could manually.”

As humans we naturally don’t like change … the best property apps allow agents to conduct inspections more efficiently than they ever could manually. John Antill, Co-Founder, Brightchecker.

The Brightchecker inspection app is smart device friendly and can be used when undertaking Fitness for Human Habitation checks, Legionnaires assessments and HMO management checks, as well as inventories. The app’s checklists are brilliant in their own right but are fully customisable and can include photos, as well as comments.

“Brightchecker offers accuracy and consistency, which are two important factors when capturing home inspection data,” adds John. “Our reports are clear and concise.”

Say goodbye to data duplication

Integration with existing CRMs and software platforms, including Alto, Reapit, Gnomen, Qube, MRI, SME Professional, Rightmove Referencing, Fixflo, Jupix, Acquaint, Let Tech Solutions and PropCo, to name a few, is where apps have a key advantage. Debunked, this means the initial data entered into one system can be seamlessly transferred to another – with fields automatically populated and double data entry avoided.

The Lettings Hub has just announced a trio of fresh partnerships. Its new integration with Reapit will allow agents to create tenancies using the data already held within the CRM, while integrating with Home Telecom will automate the utility notification and switching stages. Finally, its integration with live chat software provider Tawk will give letting agents, landlords and tenants another channel of direct communication with The Lettings Hub. Likewise, The Depositary is celebrating two new integrations – ACT Property and Hinch PM – which join Inventory Hive, Inventory Base and No Letting Go/Kaptur.

One of The Depositary’s existing integrations is with the Tenancy Deposit Scheme (TDS), who has developed TDS API – an interface that allows property management software and customer management tools to work together seamlessly. Features, such as transferring deposit registration details at the click of a button, being able to download proof of deposit protection and easily transferring deposits, enhance in-branch productivity.

This automation has not only simplified deposit administration but has led to an overall increase in work efficiency. Operations have become streamlined. Debbie Davies, Head of Sales, TDS.

“The feedback from our agents demonstrates how invaluable this solution is,” comments Debbie Davies. “This automation has not only simplified deposit administration but has led to an overall increase in work efficiency. Operations have become more streamlined, resulting in considerable time and cost savings.”

All in one place

As well as new integrations, the beauty of apps is the ability to launch new features within the software. Inventory Hive – property inventory software that can automate tenant feedback, compliance reminders and inspection scheduling – already has 360° cameras built into its app. Now it has launched a diary management function with Google Maps integration, which negates the need to switch between multiple apps when managing property visits. There’s full suite of automated tenant communications, including recurring scheduling and appointment confirmations, while the map function allows for efficient route planning, travel and time calculations, and mileage monitoring.

The company’s Richard Abbots says the launch was prompted by its research that showed coordinating property inspections is one of the most time-consuming admin tasks a property manager can undertake. “Our new feature helps save property managers up to 20 minutes in office admin time for every single interim visit that’s scheduled. For a 250 property portfolio with 6 monthly interim visits, that’s just shy of 14 hours saved each month.”

Our new feature helps save property managers up to 20 minutes in office admin time for every single interim visit that’s scheduled. For a 250 property portfoli–14 hours a month. Richard Abbot,s CEO, Inventory Hive.

App can earn agents income

One Utility Bill’s ‘Notify’ service is another app trading on its ability to save time, specifically during the check in, check out and void stages. “Notify takes utility registration out of agents’ hands entirely, saving an enormous amount of time that would be spent on the phone and sorting admin,” says the company’s Sophie Humble.

Notify takes utility registration out of agents’ hands entirely, saving an enormous amount of time that would be spent on the phone and sorting admin. Sophie Humble, One Utility Bill.

As well as ending endless calls to gas, electricity and water suppliers, Notify allow agents to earn commission – something that’s possible with a number of other apps too. “Agents can earn up to £4,320 per year in commission based on 20 move-ins per month,” adds Sophie. “Notify integrates with a range of existing CRMs, so there’s a good chance agents can get set up with just a few clicks, with no need to learn any new systems.”

Notify is among a breed of property apps that involve the agent and the tenant. In Notify’s case, the new tenant gets an email and a telephone call telling them who the incumbent utility suppliers are, as well as details of alternative packages that may save them money. The Depositary is moving in similar circles by actively contacting renters. Its app is devoted to making the deposit recovery process as streamlined as possible for everyone involved. “We aim to reduce the admin burden of tenancy conclusions by up to 90 per cent,” says The Depositary’s Kristjan Byfield.

Manual work that would have taken three to four hours has been reduced to as little as 15 minutes, while tenants are reunited with their deposits more quickly. Kristjan Byfield, Co-Founder, The Depositary.

“Our platform automates many of the tasks involved with the end of tenancy stage. The process starts once notice has been given and is managed all the way to refund and/or a dispute,” adds Kristjan. “Agents using The Depositary have found manual work that would have taken three to four hours has been reduced to as little as 15 minutes, while tenants are reunited with their deposits more quickly. Our agents currently average deposit refunds of just 11 days, versus the national average of 21.”

More in touch with tenants

Such efficiencies can be attributed to the app’s two-pronged attack. In the four weeks before their tenancy ends, the app automatically notifies tenants of when their check out is taking place and what is expected in terms cleaning, with the app even recommending cleaning companies. It’s a cajoling dialogue with renters designed to help avoid deductions and disputes.

Apps like The Depositary offer us tantalising glimpses of the future, showing how the relationship between letting agents, property managers and tenants can be responsive, dynamic, holistic and app based. It’s an exciting new communication blueprint that is fast developing at Spike.

Its two software products are currently finding favour with build-to-rent, new development and estate managers. Spike Lettings manages the end-to-end tenant journey in a traditional way but also offers a nifty reservation facility, during which a property is taken off the website for 30 minutes while the tenant pays a reservation fee, thanks to integrations with payment platforms.

Creating a new lettings lifestyle

It’s Spike Living that’s the most mouldbreaking, however, with emphasis on an instant messaging service that replicates the speed, responsiveness and familiarity of WhatsApp, and a lifestyle-driven platform that has echoes of social media.

“Today’s Generation Rent want one place to manage their tenancy and that’s on their mobile phone,” says Spike’s Jonny Wootten. “Having a quick way to message an agent or property manager is good for building a rapport. Young renters are not always comfortable picking up the phone and they consider emails quite formal.”

Generation Rent want one place to manage their tenancy and that’s on their mobile phone. Having a quick way to message an agent or property manager is good for building a rapport. Jonny Wootten, Marketing Director, Spike Living.

Instant messaging’s on-screen push notifications also dial into more modern way to keep up to date and agents can exploit this. “Property managers can notify tenants that new versions of documents have been published, send ‘to all’ messages for those living in a block and start a chat with an individual renter,” adds Jonny. “App-based messaging is a natural way to communicate and managers are more likely to get a response.”

The friendly Spike interface also yields practical functions. From the app, tenants can view appliance manuals, instruction videos and fire safety procedures, log and track maintenance issues, make payments and book shared amenities. More than this, the app strives to build new communities through engagement, with the ability to connect tenants who have shared interests, offer renters discounts at local businesses and even provide live travel feeds.

Time is money

For everyone in business, time is the most precious commodity and as the saying goes, ‘time is money’. Those who embrace the right time-saving technology can use that time elsewhere to grow the business. And it can provide, potentially, a more efficient and consistent service, appreciated by staff and clients alike.

The post Proptech for lettings – c’mon, get appy! appeared first on The Negotiator.

They are making choices over whether to pay the rent or pay the electricity or feed their kids…

Thanks to rising interest rates and harsh government policies such as the looming eviction ban, landlords are quitting the private rental sector in droves – reducing supply and pushing up rental prices. That leaves tenants between a rock and a hard place, with some facing the choice between paying the rent or feeding their children. In this feverish climate, it’s a “no brainer” for agents to ensure that landlords have rent protection in place, warns our panel of experts.

‘Making choices about feeding the kids’

“Evictions are at an all-time high at the moment,” says Eddie Hooker, CEO of Hamilton Fraser and Landlord Action. “We are seeing an 80 to 90 per cent increase in eviction requests and Section 21 and Section 8 requests coming in.” It’s partly because landlords are selling up, but there is more and more evidence that this is a costof- living issues. Tenants are being advised to stay put by CAB and councils, and they are making choices over whether to pay the rent or pay the electricity or feed their kids.

We have already seen a 10 per cent increase [in rents] across the market – that is going to put more pressure on tenants. I don’t know what the solution is… Eddie Hooker, Hamilton Fraser.

“We are seeking a definite correlation there and I do think if interest rates keep going up, and landlords increase rents – we have already seen a 10 per cent increase across the market – that is going to put more pressure on tenants. I don’t know what the solution is.”

He adds: “The real issue is the lack of money coming in – and obviously landlords are feeling the pinch as well.

“For the amount it costs – an average policy is £300-£400 – it is one of the most important protections a landlord can get. And from a letting agent’s point of view, if there is no rent coming in there is no management fee being charged.”

‘Tenants can’t keep up with costs’

Andy Halstead is CEO of the Barbon group of specialist insurers, Homelet, Let Alliance and Rentshield Direct. He agrees with Hooker. “We’ve never sold as much rent guarantee as we do now – even during the Covid we didn’t see demand like we are at the moment,” he says.

“If you think about the cost of a rent guarantee policy and the risk associated with a tenant defaulting, it’s an absolute no brainer – why would you not do it?”

There’s only one direction rents are going in and that is up, and tenants just can’t maintain that level of increase in costs. This has got to break somewhere. Andy Halstead CEO, HomeLet,Let Alliance and Rentshield Direct.

Halstead says landlords with mortgages are suffering because the mortgage rates have shot up, they are paying tax on the rent regardless of whether the property is profitable or not, and there is the supply problem – which will only get worse as landlords leave the sector.

“So there’s only one direction rents are going in and that is up, and tenants just can’t maintain that level of increase in costs. This has got to break somewhere. But because of the lack of property tenants are being forced to pay whatever they can.

“I don’t see light at the end of the tunnel for a couple of years, I think we are going to have to get through this economic cycle. Landlords getting whatever protection they can is crucial.”

Landlords need to reduce risks

Natasha Barrow, Account Director at Arthur J. Gallagher, says one of the big topics at the recent Propertymark One conference was the issue of tenants being unable to afford to pay their bills.

“Clearly tenants are struggling… If they are going to be in financial difficulty then rent is going to be something they will unfortunately default on if it is a choice over eating or paying rent. So we see it as a really important time to be taking out rent guarantee cover.”

Clearly tenants are struggling… If they are going to be in financial difficulty then rent is going to be something they will unfortunately default on. Natasha Barrow, Arthur J Gallagher.

Richard Dawson, rental sector expert at RentGuarantor, is in agreement. “With the increase in the cost of living and a more challenging financial environment for landlords because of interest rates, it is my opinion that the need for landlords to assess and reduce their risks is more important than ever,” he says.

RentGuarantor helps landlords and agents by standing as the guarantor in relation to rent. The service is subscribed to by the tenant, meaning there is no cost to the landlord. Richard Dawson, RentGuarantor.

“Landlords are uncertain of the economy and, having discussed risk with many landlords at length recently, are feeling the pinch of increased interest rates. The uncertainty around interest rates stabilising or reducing means landlords are taking more precautions than ever to mitigate the risk of rent arrears.

You need to do all you can to keep your landords safe and secure – and make a commission along the way.

“Tenants of course are feeling the effects of inflation, too, with increased energy prices, food prices and a general increase in the cost of living having resulted in more tenants being in arrears now than during the coronavirus pandemic.”

Big growth in policy sales

Over at Goodlord, CEO William Reeve has seen the same growth in rent protection insurance. “The latest dynamic is the shortage of rental supply and higher interest rates pushing up rent by double-digit amounts, which squeezes tenants’ disposable income and puts additional stress on them,” he warns. “As a result we have seen sales of insurance grow substantially.

Landlords, just like tenants, are being squeezed, leading to many leaving the market. But for many, the protection and peace of mind of insurance are compelling value. William Reeve CEO, Goodlord.

“Landlords, just like tenants, are being squeezed, leading to many leaving the market. But for many, the protection and peace of mind of insurance are compelling value – for the equivalent of a week or two’s rent, a landlord can protect an entire year of income and any legal costs arising from recovering arrears.”

He says letting agents play a key role in highlighting the risks ahead, particularly with the changing legislative landscape.

“With Section 21 looking to be abolished by the Renters (Reform) Bill, many landlords will be unfamiliar with the process for enforcing their rights, and a letting agent providing rent protection and claims support could become even more important.”

Reading the small print

When it comes to buying insurance, Eddie Hooker of Hamilton Fraser warns that “not all policies are equal”. “Read the terms and conditions,” he advises. “Some will have an excess, either the deposit or one month’s rent; there are other rent guarantees that have no excess. Then there are T&Cs you have to be careful of. Some insurers say you can’t raise a claim for two months, some will pay until you let it, others only for six months or 12 months.”

Marc Corcoran, product and placement director for Arthur J. Gallagher, comments: “Not all legal expenses and rent guarantee policies are the same, and we would urge you to check the terms and conditions very carefully, for example:

• Does the policy pay rent beyond the policy period?
• Is the cost of issuing eviction notices covered?
• Will rent will still be paid when evictions are suspended – as they currently are in Scotland until at least September 2023?

Not all legal expenses and rent guarantee policies are the same, and we would urge you to check the terms and conditions very carefully. Marc Corcoran, Arthur J. Gallagher.

Mediation

Another area our experts say agents should focus on is to keep talking to tenants – but they warn it’s vital that the insurer is notified as soon as someone falls into arrears.

“Our Legal Expenses and Rent Guarantee Insurance has been reconfigured and relaunched, introducing a robust mediation process for all claims,” says Corcoran.

“This has given landlords access to an expert mediation facility that would work with them and their tenant to come to a fair agreement. Once these methods have been exhausted, the landlord’s case would be referred to solicitors ready for eviction proceedings to commence as and when possible.”

Richard Dawson says that in the event of non-payment of rent, RentGuarantor will mediate any arrears by discussing options with the tenant, create any necessary repayment plans, and should it be necessary, serve any section notices and complete the eviction process on behalf of the landlord or letting agent, at no cost to the landlord or agent.

“This is where RentGuarantor helps landlords and agents; by standing as the guarantor in relation to rent. The service is subscribed to by the tenant, meaning there is no cost to the landlord or letting agent.

“We aim to mitigate the risk of arrears for landlords and importantly ensure we provide guidance and support to any tenants who may find themselves in arrears.”

In-house legal team

Let Alliance has its own in-house legal department that steps in immediately if tenants fall into arrears. “When a tenant goes into arrears we ask them to notify us and then we take over rent collection, and we have a lot of success in that,” explains Andy Halstead. “A significant percentage of our rent guarantee claims never end up with a claim because we collect the money from the tenants.

“Because we try to intervene when there is still only one month of arrears we have a very good success rate of getting that money in, which means the problem then goes away. If the problem doesn’t go away then before we start the legal process we act as mediator between the landlord and the tenant to see if there is any way to get an agreement to help both sides to resolve the problem.”

No brainer

One thing is for sure, given the economic climate and the pressures on landlords, rent defaults are going to get a lot worse before they get better. You need to do all you can to keep your landords safe and secure – and make a commission along the way. As Halstead says, encouraging your landlords to take out some kind of rent protection insurance really is a “no brainer”.

The post Protect and survive appeared first on The Negotiator.

Yet, confusion remains around landlord and agent obligations when it comes to protecting deposits, which has only been compounded by the emergence of new suppliers and deposit alternative products. According to the UK Landlord Survey, 60 per cent of landlords said they find deposit disputes difficult, so here we provide a short guide on tenancy deposit schemes and what the future could hold.

The two main schemes

The two main types of deposit protection schemes are Custodial and Insured.

As Matt Trevett, Managing Director at The Deposit Protection Service (DPS), and one of the government-approved schemes, explains. “Under our free Custodial service, the landlord or letting agent provides us with a tenant’s deposit, which we hold for duration of the tenancy.

We’re interested in the idea of a deposit transferring from one property to the next under the same tenants’ name and are supporting conversations with government and industry. Matt Trevett Managing Director, DPS.

“When the tenant moves out of the property, the landlord lets us know whether they’re happy for the deposit to go back to the tenant in full, or whether they would instead like to make a deduction to cover costs such as cleaning or damage.

“If the tenant agrees to the deduction, we pay each party accordingly. If they don’t, both tenant and landlord can make use of our independent, free-to-use dispute resolution service.

“Landlords or letting agents who want to hold the deposit themselves can take part in our Insured Scheme. Here, the landlord or letting agent holds the deposit and pays a small fee for us to protect it. To use the Insured option, letting agents must be a member of an approved Client Money Protection (CMP) scheme.

“As with custodial schemes, if the tenant and landlord using an Insured scheme cannot agree on the basis for the return of the deposit at the end of the tenancy, our independent, free-touse dispute resolution service is available.”

Eddie Hooker, Managing Director of insurance specialists HFIS Group, which owns Mydeposits, says, “In terms of tenant/ tenure and landlords, both Insured backed and Custodial offer the same dispute resolution process generally, however, there is more risk with the Insured-backed scheme as the onus is on the landlord to lodge the money at the time of dispute. However, the tenant is fully guaranteed by a default insurance process and will never lose out on a return of an award if one is made by an adjudicator.

A Custodial scheme is free, the deposit money is held by the scheme during the tenancy and 100% secure and the tenant may prefer to know money being held independently. Eddie Hooker Managing Director, Mydeposits.

“The advantage of using a Custodial scheme is that it’s free, the deposit money is held by the scheme during the tenancy and 100% secure and the tenant may prefer to know money being held independently. Generally, the Custodial scheme is a quicker process overall with less administration for the landlord, as the scheme holds the deposit money and doesn’t need to request this to be lodged by the landlord at the time of dispute.”

A clear choice?

The decision on which scheme to use often comes down to the confidence and experience of the landlord or how long the agent has been established, says Steve Harriott, Group CEO of Tenancy Deposit Scheme (TDS).

“New agents may struggle to meet these tests [for CMP] so we would encourage them to use the Custodial scheme,” he comments. “Larger agents tend to prefer the Insured scheme as it gives them greater flexibility in managing the end of tenancy process.”

Steve adds, “Similarly, with a landlord we would always encourage them to use the Custodial scheme as the repayment process is managed by the scheme and does not require the landlord to be responsible for this. However, more experienced landlords may well be comfortable with the Insured schemes.

“Tenants would probably say that they preferred the certainty of knowing that their cash deposit was helped by a scheme and not a landlord or tenant. But the choice is down to their agent or landlord.

“We are definitely seeing a switch towards Custodial schemes and away from Insurance-backed schemes; driven by the fact that custodial is free and the fact it is zero cost is a key driver in times of high costs and inflation in the economy.”

DEPOSIT DISPUTES – HOW BIG IS THE ISSUE?

Regardless of which tenancy deposit protection scheme or provider you get statistics from, the fact remains that the number of disputes remains fairly low.

In addition to Reposit’s report of less than 5%, government data from the Department for Levelling Up, Communities and Housing (DLUCH) shows that disputes have been below 1% of all tenancy deposits protected since 2011, with the last two years being at the lowest since 2009.

The majority of dispute applications were initiated by tenants across all TDS schemes (74%) in the last year.

TDS’s Steve Harriott comments, “This is a continuation of a trend seen over the last five years with tenants raising more disputes than agents/landlords. This is likely to reflect an increased awareness of our free resolution service among tenants who have been renting in the private rented sector for a number of years over several tenancies and now fully understand that they are always able to commence the dispute process.”

In terms of outcomes, there appears to usually be some kind of compromise between landlords and tenants, as Matt Trevett from DPS explains.

“Since April 2018 between 55 and 59% of disputes at the end of a tenancy each quarter have resulted in the disputed amount being split between landlord and tenant,” says Matt. “Between 14 and 20% of disputes each quarter have resulted in the landlord receiving the full amount that they have claimed by producing evidence of sufficient quality to support their position.

“Between 25 and 29% of disputes each quarter have resulted in the rejection of the landlords’ claims and the tenant being awarded the full amount that was disputed.

“The value of deposits amounts disputed has fluctuated between £363.78 and £667.48 during 2018 and 2023.

“Every dispute is different, and, as a result, averages are difficult to interpret.”

Eddie Hooker, on behalf of Mydeposits, comments, “In 2022, Mydeposits dealt with some 13,000 disputes valued at £11M with the tenant receiving some or all of their deposits in around 80% of cases. Disputes are up by around 15% against 2021.

“Generally the dispute ratio is 3% of end of tenancies that come through ADR to get a formal resolution. A lot of negotiation takes place between the tenant and landlord/agent at the end of the tenancy and before coming to a TDP scheme. It is only where an agreement can’t be reached or there is a stalemate that the case will come to a TDP scheme to resolve. This could be for the whole of the deposit or for some of the deposit.”

Across all data sources, cleaning, repairs and redecoration have been the most common dispute reasons and the average adjudication time is around 21 days.

Affordable alternatives

In May, it was announced that Skipton Building Society will be offering 100 per cent mortgages to renters who can demonstrate at least a year of paying rent and have a good credit score. It’s the first time such a product has been available for any borrower since 2008 and it brings rental deposit alternatives back into the spotlight.

As the market heads towards getting more people on the property ladder, new deposit products have sprung up which aim to make renting a property more affordable too – at least from a new tenancy perspective.

30 per cent of tenants can’t raise the average of £1,378 needed for five weeks’ rent…

One such supplier is Reposit. Research by the firm found that 30 per cent of tenants can’t raise the average of £1,378 needed for five week’s rent, based on recent Goodlord monthly rental values. Instead, these tenants borrow money from friends and family or use credit cards, overdrafts and personal loans.

Reposit’s solution is to charge tenants one week’s rent as a non-refundable fee and gives landlords eight weeks’ protection.

CEO, Ben Grech, comments, “We believe Reposit is a more appropriate solution for the reality of tenancies in the UK, working more efficiently and fairly for each stakeholder in the rental process – landlords, agents and tenants alike.

Importantly, the tenant remains liable for any damage at the end of the tenancy, with any disputes resolved through an independent resolution service within 14 days. Ben Grech CEO, Reposit.

“Importantly, the tenant remains liable for any damage at the end of the tenancy, with any disputes resolved through an independent resolution service within 14 days. Reposit’s insurance-backed product structure means that landlords are guaranteed payment in the event of a tenant defaulting on any charges normally covered by a cash deposit. It is currently one of only two deposit alternatives in the UK that have achieved FCA (Financial Conduct Authority) regulated status.

“Deposit alternative products present an effective and entirely new solution to the problem cash deposits aim to solve, that creates a win-win for landlords, agents and tenants, without any of the affordability issues. We therefore see adoption of deposit alternatives continuing to increase.”

An investigative piece in The Observer at the end of last year reported examples of renters being forced or coerced into signing up to a zero or alternative deposit scheme, with agents apparently earning commission of up to 30% for each person they refer.

At the end of the term, some were left with adjudication fees and costs to repay for repairs. Although Reposit says that less than 5% of all their tenancies end in a formal dispute.

Genuine concern

Sam Reynolds, CEO of deposit alternative Zero Deposit, says, “There should be genuine concern amongst letting agents who are directly selling deposit alternative products, and not offering tenants a choice of deposit options, that they are in breach of the Tenant Fees Ban – above all in cases where the tenant is pressured to buy a deposit alternative product. I’m amazed if this isn’t on their radar. The size of fines and reputational damage are significant.

Letting agents who are directly selling deposit alternative products and not offering tenants a choice of deposit options, are in breach of the Tenant Fees Ban. Sam Reynolds CEO, Zero Deposit.

“The value of our fully regulated alternative is that the sales process is managed by Zero Deposit. The product can only be introduced to tenants by letting agents, it cannot be sold. This guarantees that it is compliant, fair and offers a genuine choice.

“With our new product, Deposit+, landlords benefit from enhanced six- week cover whether the tenant chooses Zero Deposit or a cash alternative.”

“We continue to innovate and improve standards in our category. We’ve helped close to 120,000 tenants move deposit-free, provided landlords with over £90m in deposit protection, with money hitting their bank account far faster than with a cash deposit. Rental arrears claims are paid within one working day.”

On deposit alternatives, Steve Harriott of TDS says, “We think that these schemes do have a role to play in the deposit protection market, but make no mistake they remain a niche player, in spite of the hype, with the cash deposit still being the overwhelming preferred choice of landlords and agents.”

A trend, seen over the last five years of tenants raising more disputes than agents/landlords, is likely to reflect an increased awareness of our free resolution service among tenants. Steve Harriott Managing Director, TDS.

He warns, “There is an emerging issue that we and Zero Deposit are concerned about, and that is about the lack of regulation of most of these new providers. Just spend a few minutes on the Trust Pilot website of some of the non-deposit providers and read some of the negative reviews from tenants, who claim they have been mis-sold their policies.

“It is an area that concerns us and we have raised this issue with the Government. For some tenants, a no deposit solution will make sense, but they all need to understand that the policy does not operate like a normal insurance policy; they remain liable for any losses that they incur for their landlords.

“We are also concerned about those policies that provide the landlord with sometimes up to 10 weeks cover; twice what tenants would need to pay in a cash deposit scheme. Do tenants really understand the liabilities they are taking on when they buy such a policy? Probably not always, which is why regulation is important.”

These products were also included in the recent update to the Government’s ‘How to Rent’ guide in March.

It stated: “You may be offered a deposit replacement product as an alternative to a cash deposit. A landlord or agent cannot require you to use a deposit replacement product but may allow it as an option without breaking the Tenant Fees Act. There are several different deposit replacement products available. Depending on the product, you may need to pay a non-refundable fee upfront (often equivalent to one week’s rent) and/or a monthly payment for the duration of your tenancy. With most products, you will still be responsible for the costs of any damages incurred, at the end of the tenancy or required to pay an excess on any claim for damages or unpaid rent. It is strongly advised to always check the terms and conditions and to see if it is regulated by the Financial Conduct Authority.”

Reposit’s Ben welcomes the news: “We’re pleased to see the Government’s acknowledgement that deposit alternatives are an increasingly relevant part of the UK’s private rented sector. Equally we support the message that tenants should check if the product they’re offered is FCA regulated.”

Lifetime deposits

Matt Trevett of DPS is also open to the prospect of other solutions. “We’re interested in the idea of a deposit transferring from one property to the next under the same tenants’ name and are supporting conversations with both government and the broader industry about how a ‘lifetime’ proposal might work in practice. With over 17 years’ experience providing deposit protection services across millions of tenancies, we believe we can add significant value to this conversation and help the lettings industry remove friction and reduce void periods.”

Eddie Hooker concludes, “It is estimated that less than one per cent of all deposits are foregone in favour of no deposit alternatives. In this time of property scarcity and high tenant demand, landlords have a greater choice to choose tenants who can afford a traditional deposit.

“Some of the high ‘fees’ charged by no deposit schemes also put off tenants from purchasing these products as they are still responsible for any issues at the end of the tenancy.

“Whether they will continue to be attractive over the next few years is debatable, but they are available and choice for all parties is important and financial circumstances dictate.”

Balancing risk vs reward

A perhaps commonly unknown fact is that deposits themselves are not actually legally required. Landlords can take the risk if they wish to rent a property without asking for one, but if they do – in the traditional sense – it must be registered with a scheme within 30 days of the tenancy start date. Not doing so can result in fines for failure to protect the deposit.

In reality, not taking a deposit at all does not make business sense. There is a lot of protection out there for tenants, but property is an expensive asset and with the Renters Reform Bill proposing the abolishment of Section 21 evictions, landlords need some form of security that they can claim some funds back in the event of rent arrears and damage or disrepair.

However, deposit replacement products are not required to be registered currently and this lack of solid regulation is what’s holding the growth of this area of the market back and potentially putting landlords off using the services.

Stories of cavalier behaviour by tenants, agents and landlords were rife at one point and insisting on a deposit alternative rather than offering it as an option is illegal – plain and simple.

The noises being made do provide some hope, of increased regulation, transparency and security for all customer groups, but all should be prepared to do their research and carry out necessary due diligence.

The post Safe as houses appeared first on The Negotiator.

“Over the last two years, we have seen fraudulent applications increase by over a third, from 110 applications a day in 2021 to 150 a day in 2022,” says CEO of HomeLet, Let Alliance and Rent4Sure, Andy Halstead. “Worryingly, this is continuing into 2023,” and there is a very particular referencing trend emerging.

Over the last two years, we have seen fraudulent applications increase by over a third, from 110 applications a day in 2021 to 150 a day in 2022. Andy Halstead CEO, HomeLet, Let Alliance & Rent4Sure.

It pays to tamper

Wouldn’t we all like to add an extra nought onto the amount we earn? The majority of us, however, are resigned to how much we receive in wages and what that affords us in life. Sadly the cost-of-living crisis – an economic situation that’s biting hard on the heels of Covid – is forcing some tenants to take radical action.

Although recent research by Goodlord found that only 1 in 1,000 of its tenancy applications contained a fraudulent element, it was a counterfeit payslip that was involved in 54% of those isolated cases. Payslips can be crudely forged to show a greater income than actually exists but there is also evidence of confusing or missing off gross/net pay and fudging tax codes.

Amending personal details and figures is typical, while fake ID documents are used by a prospective tenant to substantiate who they say they are…

It makes sense that tenants are tempted to falsify their earnings in harsh fiscal times, especially as referencing becomes more stringent and the cost of renting keeps rising. In fact, the latest HomeLet Rental Index – reflecting activity in February 2023 – positioned the average UK rent at £1,175 per month. That’s a rise of +0.3% on rent levels seen in January and a figure that takes year-on-year rent rises to +10.2%.

Spotting fakes, whether that’s wage slips, passports or employer reference letters, isn’t as simple as holding the document up to the light (a test for those old enough to remember a banknote’s silver line and Queen’s head watermark).

Authenticity and origin is paramount but human error in a branch setting sometimes leads to mistakes and fraudulent documents can – and do – slip through the net. Often it isn’t a clever counterfeit that catches agents out. It can be a lack of time – time to run a Companies House check on an employer or a deep dive into the legitimacy of a company’s domain name.

Speed versus due diligence

On the point about time, perhaps it’s the speed at which the lettings market has been moving that leads to a little hastiness. No agent, however, should compromise the legality and compliant nature of its business due to cut corners. Someone who understands the need for speed – especially when a landlord wants to minimise voids or when there are multiple tenant applications – is Stuart Horsfall from Proceda Landlords UK. “We offer two, fully inclusive credit referencing packages for busy letting agents,” says Stuart. “Both packages can be accessed immediately; there is no lost time waiting for a reference to be returned as the references can be carried out within minutes on the Proceda website.”

We offer two, fully inclusive credit referencing packages for busy letting agents; both packages can be accessed immediately – there is no lost time. Stuart Horsfall MD, Proceda Landlords UK.

Agents can choose an ‘in-depth’ credit referencing pack in collaboration with Equifax, which allows agents to carry out all the due diligence required to reference new tenants. It also includes ten referencing checks that yield Right to Rent data, ID verification, Know your Customer and Risk Navigator. A step up is Proceda’s package that works in tandem with Open Banking, for additional real-time risk assessment of affordability and income.

Technology revolution

Mentioned by Stuart is one of tenant referencing’s two new kids on the block – Open Banking. The other is artificial intelligence (AI) and Tom Goodman from Vouch is a huge advocate of both. “New technology, such as Open Banking, machine learning enquiries and AI-based ID tools, means fraud can be picked up with a much higher degree of accuracy than ever before,” comments Tom.

New technology, such as Open Banking, machine-learning enquiries and AI-based ID tools, means fraud can be picked up with a much higher degree of accuracy . Tom Goodman Managing Director, Vouch.

“Open Banking and AI is no longer the preserve of big agencies with deep pockets and teams of IT specialists. It can be easily and cost-effectively integrated into any letting agents’ operations. For instance, Vouch can deliver an advanced and secure service from only £6 per full tenant reference. Technology is already transforming how referencing is handled at Vouch for the better, and we predict that this year will see its presence become firmly cemented across the whole market,” adds Tom.

While Tom says the vast majority of tenants don’t lie about their income or falsify documents for the referencing process, the small minority who engage with fraudulent activity are getting more creative in how they cheat the system. Thankfully, the tools companies now use to spot fakes are becoming increasingly more sophisticated – an aspect that Tom says, “helps safeguard agents against nefarious applications, as well as contributing to increased rates of detection.”

As well as Open Banking, which provides a real-time overview of incomings and outcomings (including wages), tech-driven referencing from a supplier such as Vouch can spot other fraudulent inconsistencies that are often overlooked in branch. This touches again on the lack of desk time needed to manually investigate the details supplied but also highlights the in-branch absence of hypersensitive technology designed to spot even the most subtle of flaws.

Nailing the small nuances of fraud

“Vouch uses identity verification software, which matches real-time photos with passports, ensuring the person is who they say they are and that they have a right to live in the UK. In addition, we use email recognition software to ascertain whether an email is real and we see how long it’s been in use for. This can help us pick up on cases where someone might be sending a reference from a fake employer, for example.”

It’s at this point that Tom mentions guarantors – a tool that gives tenants another option other than artificially inflating their income – and rent protection insurance for a thorough ‘belt and braces approach.

Andy is another fan of AI capabilities and feels new technology can work in tandem with established cross-referencing data points and also the human touch. “HomeLet, Let Alliance and Rent4Sure continue to evolve their tenant referencing: integrating technology, data and AI with our team of referencing experts, our CIFAS cross-checks and our own unique default database.”

The AI science aspect is mind-blowing and illustrates how a machine can rival the sharpest of minds and eyes. “The AI system integrated into the HomeLet, Let Alliance and Rent4Sure processes adds an extra layer of protection against tenancy fraud. The system checks every document we receive, whether a PDF, image or scanned copy, and continues to get smarter as it learns from every document processed,” says Andy. “The multi-layered document analysis technology inspects the metadata and structure of files to highlight uncommon changes and identify tampering of pixilation to detect forged images.”

Planning for the unexpected

Despite Open Banking and AI joining the existing referencing framework, tenants can change just as much as the proptech. “Tenancies can go wrong, despite every care with the selection and the management of the rental property,” comments Graham Sandley from Diligent Services. “The unexpected can happen and tenants may be unable to pay the rent due to redundancy, accident, sickness, separation or divorce.”

The advantage of rent and legal protection is that experts can be brought in at the onset of a problem. This means matters can be resolved quickly and the property swiftly re-let. Graham Sandley MD, Diligent Services.

He agrees with Tom on the point that rent and legal protection should be offered by agents to landlords in today’s climate. This ensures the client is covered should a falsified wage eventually catch a tenant out and they fall into arrears “The advantage of rent and legal protection is that experts can be brought in at the onset of a problem. This means matters can be resolved quickly and, if necessary, the property can be swiftly relet,” adds Graham. “In the meantime, the landlord will have had the benefit of rental guarantee and cover against the legal expenses incurred in obtaining vacant possession.”

Diligent Services’ rent and legal protection typically offers nil excess, cover for up to 6 or 15 months’ of rental payments should the tenancy fall into arrears – to the value of £3,000 per month – and cover for legal expenses, including eviction court costs.

Fraud and the cost of living

The cost-of-living crisis – and its relationship with fraudulent tenants and affordability – is a topic The Lettings Hub is increasingly talking to its clients about. As well as offering a robust referencing solution through its BOX software and integrated product range (The Lettings Hub can perform all checks for the agent or they can manage the process in-house using the supplier’s software for support), the company’s Heidi Shackell has additional advice.

Tenants can choose to instantly verify their identity, address and credit history, and verify their income from the last 12 months using Open Banking. Heidi Shackell MD, The Lettings Hub.

“With disposable income decreasing for many across the UK, it is sensible for letting agents to review the affordability criteria they apply to their tenants. Good referencing providers will be able to tailor this for each client dependent on their needs. We are also seeing more clients opting to require a guarantor, as standard, as a pre-emptive measure,” says Heidi.

The Lettings Hub is also a big supporter of placing equal emphasis on the tenant when it comes to financial calibre and character. “Agents can allow renters to lead the process via our Property Passport solution,” adds Heidi. “Tenants can choose to instantly verify their identity, address and credit history, and verify their income from the last 12 months using Open Banking.”

There’s also an enhanced Property Passport, that, for a small fee, allows the tenant to add an additional review of their financial data; provide the letting agent with an expert recommendation; pull in a reference from their previous letting agent or landlord to vouch for their suitability, and obtain an overall tenancy score to show how good a tenant they could be – all delivered digitally within 2-3 working days.

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Then, in early March, there were signs that all was not well. The interest rates on swaps – used by smaller banks to finance lending – started to rise once more. Mortgage rates started to creep up again. Central banks said inflation might be more ‘baked in’ than had been thought.

Jerome Powell, chairman of the US Federal Reserve, said he would have no hesitation in increasing rates if necessary, a warning echoed by the European Central Bank.

Have rates peaked?

So where does that leave the outlook for mortgage rates in 2023? Is there more to go, or have they peaked? “That was my view until a few weeks ago but I think we have kicked things out a bit further now,” says Jeni Browne, Sales Director at Mortgages for Business, a broker focused on the buy-to-let (BTL), commercial and bridging market.

The official line is that we will see rates increase to 4.5%, that should then be the cap for the rest of this year, and we may see base rates start to ease back down in Q2 2024. Jeni Browne, Mortgages for Business.

“The official line from the business is that we will see rates increase to 4.5%, that should then be the cap for the rest of this year, and we may see base rates start to ease back down in Q2 2024.” She doesn’t see rates declining at all this year. “Swap rates have been sitting at around 3.5% for quite a while but they started bubbling up again in the past couple of weeks and are now sitting at more like 4%.

“It seems to be market nerves around eurozone inflation and the fact they hadn’t quite appreciated how bad things were there, so they undercooked their inflation situation and are going to have to hype their rates. But also, the news about the US and core inflation being much higher than expected and they might have to push their rates up.”

Browne says the market is diverging, depending on the size of the lender. “Swap rates have gone up, so for lenders who rely on the money markets, their costs have gone up so their pricing should also increase. But not all lenders are funded entirely by the money markets. Many lenders are also deposit-taking institutions, so these guys are less affected by the cost of funds on the wholesale market.

“When we have been tracking fixed-rate price movements over the past few weeks, what we have seen is a lot of high street institutions – Skipton, The Mortgage Works, BM Solutions, Virgin, NatWest – all these guys have actually been reducing their rates, whereas the specialist lenders – Precise, Paragon, those kind of institutions who don’t have the same kind of balance sheet, these guys have gone very quiet on rate reductions and some have started pricing back up again.

“Overall, the message is we will see fixed rates go up over the next few weeks, but different lenders will react at different rates because of the way they are funded.”

‘Rates will be higher for longer’

Peter Beaumont, CEO of The Mortgage Lender (TML), a specialist bank focusing on the self-employed and limited companies, agrees that rates will be higher for longer to make sure underlying inflation is firmly under control. “That’s why you’ve seen the swap rates go back up. Inflation is a bit stubborn and the BoE has no economic necessity to bring rates down, so they will leave them up longer. We think there is a possibility of another increase – 0.25% to 0.5% on base rate,” he notes.

The BoE has no economic necessity to bring rates down, so they will leave them up longer. We think there is a possibility of another increase – 0.25% to 0.5% on base rate. Peter Beaumont CEO, The Mortgage Lender.

He agrees with Browne that small, specialist non-bank lenders are struggling, as they rely on the swap markets to raise finance. Big lenders sitting on large pots of cash in current and savings accounts are less affected by swap rates.

So will interest rates fall at all this year? “I would like to think interest rates might start falling towards end of year, but it’s quite a bet at the moment,” he says. “If you had asked me two months ago I would have said yes, because everything was showing rates coming down, but that has been reversed in the past few weeks. This is the most volatile I have seen it since that Mini-Budget.”

Beaumont says the uncertainty has led to a revival of the tracker mortgage: of the total market at the moment, 86% is on a fixed rate (42% is two-year, 51% five-year) and 14% on a tracker. “With trackers, people are taking a bet that rates are going to come down,” he explains – TML is looking at launching its own tracker product shortly.

There has also been a sharp increase in higher fee products aimed at those operating through a limited company, such as portfolio landlords – effectively subsidising the interest rate. In these cases, the fee can be offset against tax. About a third of that market is now at the higher fee level.

At the moment the market is predominantly focused on re-mortgaging rather than purchases, both in residential and BTL – in fact it’s running at 70% of the total in BTL. Those landlords still buying rental properties are being cautious, typically looking for higher grade energy-performance-certificate (EPC) property, so they don’t have a “cliff-edge” in 2025, when the government plans to raise the EPC threshold to grade C. “What the landlords are doing is pricing in the cost of the upgrade and knocking that off the price,” he explains.

Base rates likely to rise again

Over at the Mortgage Advice Bureau (MAB), deputy CEO Ben Thompson says predicting interest rates is “a mug’s game”, but adds, “For the near term at least, it’s safe to say we may not have seen the last of the bank base-rate increases. If they do rise again, once they do, they will most likely be at or very near the cycle peak by then.”

With most economists predicting we are entering a recession, albeit one that is not as deep as predicted, so the BoE is expected to reduce its base rate to stimulate growth. Scott Clay Head of Introducers, Together.

He believes fixed rate products are likely to harden in the near term due to the recent swap rate increases. “Competition amongst lenders for market share in a gross lending market that is predictably proving to be smaller than forecast will be fierce, and to a degree that will mean pricing stays as competitive as it can do throughout 2023,” he notes. Thompson says forecasting beyond the next six months is “nigh on impossible”.

It’s not turning out as bad as we thought. People were saying the market could be down 10% or 15%, whereas it could top out at 5% down.

“Either rates have settled at and around a new level, which by way of comparison remains lower than pricing pre-credit crunch in 2007 – or, if the Bank of England overacts in a bid to stamp out inflation and the base rate rises a fair bit more, it’s almost inevitable rates will fall again in the medium term as inflation starts to fall more demonstrably quickly back down to tolerable levels.”

Scott Clay, Head of Introducers at specialist lender Together, observes, “Times are uncertain, with most economists predicting we are entering a recession, albeit one that is not as deep as previously predicted, so the Bank of England is expected to reduce its base rate to stimulate growth in the economy once inflation is closer to its benchmark target of 2%.” He agrees that trackers are likely to increase in popularity, due to the uncertainty. “We have not seen many good tracker products since the financial crash of 2008 but I’d expect to see more of these on the market, offering more choice for borrowers,” he says. However, he warns, “Anyone taking out a tracker mortgage will need to be mindful of the fact its rate could also go up, which is a possibility if there are any more major shocks to the economy.” A rate forecast for 2023 So, pinning our experts down, where do they think mortgage rates and the housing market will end up this year?

If the BoE overacts in a bid to stamp out inflation and the base rate rises a fair bit more, it’s almost inevitable rates will fall again in the medium term as inflation starts to fall. Ben Thompson CEO, Mortgage Advice Bureau.

Jeni Browne: “If things do bubble up a little bit it’s not going to be huge, 0.2%, 2.3%; likewise with house prices – the general consensus is it’s going to be a 5% reduction on price this year and then it will start to recover. I think a lot of people are watching and waiting to see what happens, and that’s holding back transactions. “If it caps out at 4.5% I will be happy; I don’t think we will see a quick recovery because of the variables that are at play here.”

Peter Beaumont: “There is a bit more to go on the bank base rate to make sure we control inflation, but that won’t necessarily percolate down into increased mortgage rates. I’m hoping that mortgage rates are perhaps towards their peak, if not broadly stabilised.”

Scott Clay: “Based on what we know, rates will probably start falling in six to 18 months.”

Ben Thompson: “If I was a betting man – and I’m not – I think fixed rates are quite close to their new normal, and although they may ebb and flow a little from this point, I don’t see rates going back to where they were 18 months ago. We are all rapidly becoming accustomed to that view, I think, and as soon as homeowners and prospective buyers attune to this and confidence returns, our market will gently get going again.”

Consensus

Overall, then, the consensus is that we have come a long way from last Autumn’s Mini- Budget, and that once inflation is under control, interest rates should start heading down.

As for house prices, the good news for agents is that no-one thinks the market is in freefall. Let’s leave the last word to Peter Beaumont. “It’s not turning out as bad as we thought it might. A lot of people were saying it could be 10% or 15% down, whereas actually, we are seeing it as being much more marginal and could maybe top out at 5% down, which only takes you back to 2021.” And if that makes homes more affordable, “that’s a good thing”.

BUY-TO-LET – ALIVE AND RISING

Despite rising interest rates, the buy-to-let (BTL) sector has seen product choice rise to levels not seen since last summer, according to analysis by Moneyfacts.co.uk. Overall buy-to-let product availability, both fixed and variable, has improved month on month, returning to levels not seen since August 2022, when there were 2,375 different deals on offer.

Rachel Springall, Finance Expert at Moneyfacts.co.uk, believes it is encouraging to see BTL product choice gradually recovering from the shock surrounding the Mini-Budget. “The choice of deals to landlords plummeted and both the average two and five-year fixed rates rose to 6% towards the tail end of 2022, but thankfully, both rates have slowly dipped below this level, she says. “There are now 2,400 deals for landlords to choose from, up from just 988 in October 2022, thanks to consecutive months of growth.

There are now 2,400 deals for landlords to choose from, up from just 988 in October 2022.

“The drop in average buy-to-let rates appear more subdued than seen within the residential mortgage sector, but lenders have made moves to entice new business, despite some investors’ concerns surrounding rental income margins.”

However, she added a cautionary note, observing that both the average two- and five-year fixed rates are above 5%, compared with roughly 3% a year ago. “It’s clear that landlords are likely to see their monthly repayments much higher than they perhaps anticipated,” she states. “There may even be those looking to sell up this year because of the rise in interest rates, tax changes for holiday lets and capital gains tax, or even EPC requirements – all of which dampen profit margins or investment returns on the sale of a property.”

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TwentyEA claims to have the largest home-mover database in the UK, tracking 99% of the active sales market via more than 4,500 different sources. The company has built an AI machine-learning model that will look at everything from the types of property in an area, including local supply and demand, to information on homeowners – even down to their income, and whether they have just had a baby.

“We essentially score every property in the UK and we can predict who is likely to come to market in the next two months,” says head of sales Paul Jamieson. “We are analysing hundreds of different datapoints, and we say ‘in a town with 10,000 properties we think this is the top 10% likely to move in the next two months’. It’s a predictive model. You’ve got a better chance of speaking to the right people than just blanket mail-drops. The idea is you can concentrate on 10% of your town and reduce your marketing spend because you aren’t marketing to everyone. It’s giving you the opportunity to talk and market to the people you need to when they are thinking about putting their house on the market.”

The system is continually tested to make sure it is performing at maximum accuracy. “We actually look at the properties that came to market and see how many of those are in the model,” explains Jamieson. “Our top-10% model is predicting over 50% of new instructions now, which is remarkable – for an estate agent, that’s gold dust. Traditionally you would have no idea – it’s finger in the air and guesswork.

“This model learns, and by the nature of AI it learns over time. We’ve had it over three or four years and it’s on its ninth iteration, and it’s getting more and more accurate, which is quite scary, actually.”

TwentyEA works with 15 out of the top 20 agency brands. “They wouldn’t use us if our data is rubbish,” he points out. “We pride ourselves on the quality of our data. We think we’ve got the best and most accurate data, and we process it quicker than anyone else.”

The firm also has a product called Spotlight, aimed at converting more valuations into instructions.

“So if an agent has booked a valuation they can produce a Spotlight valuation report that is automatically branded to the agent. It calls in data such as how many new instructions or sales they have had, what their sales-agreed ratio is, what price they have achieved on properties on average, and how quickly they sell. It produces that in a nice report to showcase their strengths, so if they are one of the best agents in town they can prove that and talk it through in the valuation.”

One single-branch client that has been using Spotlight for six months has seen its valuation-to-instruction conversion ratio increase from 40% to 56% during that time.

Homes data on- and off-market

Meanwhile, Homesearch claims to have the most comprehensive data about homes, both on market and off market, anywhere in mainland GB. Chief Marketing Officer Sam Hunter believes there has never been a more important time to start hunting for new leads.

I genuinely believe prospecting is easier in a challenging market simply because there is more opportunity to talk to people who are struggling to sell their homes. Sam Hunter CMO, Homesearch.

“I genuinely believe prospecting is easier in a challenging market simply because there is more opportunity to talk to people who are struggling to sell their homes,” he says.

He points to a Rightmove survey from 2018 which showed the majority of properties (60%) would sell with the second agent that listed them, not the first. That figure plummeted to 12% during the Covid property boom, but is already nudging back up towards 30%.

“I believe it is simpler when the market has challenges because if you are a good agent it is very, very easy to show you are different and you understand who is actually motivated to move because their properties are already on the market, but maybe they are not getting the guidance or advice or professionalism they require from their existing agent.”

Hunter says agents can call up a potential vendor and say, ‘You’ve been on the market eight weeks, can you tell me why?’ The person might say, ‘We really want to sell but we haven’t found anywhere we want to live’. The agent can then say, “Can we come and talk to you, because I have a database of every single home in Britain and I can show you all the properties that will fit your needs and I am sure I can find a local agent and I would be happy to talk to them on your behalf.”

He adds: “When you offer someone that kind of service it becomes very tangible, because they can see it on your screen while you are in their home. It’s a compelling reason to switch agents outside of, ‘We’ll do it cheaper’ or ‘Drop your price and we’ll get a buyer quickly’.

“Our data allows you to build tech like that, and that’s what really hasn’t been replicated anywhere else. Anyone can make pins appear on a map but to have the real accurate substance behind it, that is our secret source and it’s something we are very proud of.”

Homesearch has access to what it calls a ‘secret source’ of data that has enabled it to attract a raft of high-profile clients.

“We were able to raise £5m of VC development based on the quality of our data,” explains Hunter, “whether it’s on-market information – how many properties can we accurately match to a full address to allow agents to prospect those homes, or whether it’s out of-market data – being able to tell our clients which homes are owner-occupied, which ones have not sold in x number of years, which ones have short leaseholds, etc.”

Every quarter there are three updates to the Homesearch full-address match rate – how many properties it can actually match to the full address currently on the market, allowing agents to potentially capitalise on popular properties that are oversubscribed.

Prospecting sales and lettings

Spectre is another well-received prospecting and marketing tool for agents and claims to offer the only such service for letting agencies. The software provides estate and letting agencies with both on- and off-market property data and enables them to reach out to prospective vendors or landlords at key moments in time when they are most likely to list their property or switch agencies.

“We have put some hard graft and investment into the product and invested heavily in AI and machine learning to help build things like propensity-to-sell models into our prospecting tools,” says Joe Gaudoin, the firm’s head of training and development.

Its system is based on millions of datapoints. It looks at the average time someone has lived in a home, if people might be looking at upsizing, based on the average number of people living in home, and how long that might take. The propensity-to-sell model predicts homeowners who are most likely to consider putting their house on the market, so the agent can reach out at those opportune moments.

We have put some hard graft and investment into the product and invested heavily in AI and machine learning to build things like propensity-to-sell models into our tools. Joe Gaudoin, Head of Training, Spectre.

Spectre’s AI model will highlight property in the area that is most likely to come to market. “As an agency, you can filter that down to the particular type of property you want – some prefer different price banding and may only take on properties of £500k-plus, others might filter it by the number of bedrooms,” explains Gaudoin. Agents can store all their marketing material on the system and launch campaigns at moments of their own choosing, such as when they are carrying out a ‘Sold in your road’ campaign.

As a former letting agent, Gaudoin is particularly proud of Spectre’s lettings product, which it claims to be unique. The program allows agencies to target not just any prospective landlords, but portfolio landlords. Using data from various sources, it will match properties owned by the same person at the same address. Once it is obvious there is a portfolio landlord involved, the agent can use the Land Registry’s correspondence address to target the landlord and send information about potential new rental property.

“Moving over to Spectre opens your eyes to how many new opportunities there are out there that an agent might be completely oblivious to because they don’t have the tools,” adds Gaudoin. He gives an example where an agent takes a viewing inquiry, registers it on their CRM and books them in for a viewing. “If someone is registered for a viewing and you’ve got their name and address, our system would flag up that the property is already on the market elsewhere and has been for 32 weeks. “That takes that standard conversation into an instruction conversation, and without the data they are blind to it. Without knowing that they are going to be missing so many opportunities, but with the data they can identity it straight away and capitalise on it. “Agents need to start looking at how ways they can generate more business and entice new vendors and landlords to come to market. There is no better way to do that than having access to really useful data.”

‘Comprehensive’ data source

Established in 2016, Sprift claims to offer the most comprehensive source of data on UK properties. The Sprift platform stores up to 260 data points per property from official and trusted resources, including Ordnance Survey, the Environment Agency, the Land Registry and Royal Mail. CEO Matt Gilpin is swift to point out, however, that the key value of proptech is how the technology is used.

We always say that agents know their business best, so our job is to provide them with the tools they need to use in the way that best suits them. Matt Gilpin CEO, Sprift.

“The agents that we work with realise this and from what we see are adapting the way that they use their proptech stack in line with the changing market,” he says. “For example, during the pandemic-driven property boom, lack of stock was probably one of the biggest challenges for agents. That meant prospecting tools were hugely popular, and we certainly saw an increase in agents who were using our platform via OnTheMarket to generate new off-market transactions.

“Talking to our agents across the country, the changing economic backdrop has now created a different set of issues; insulating pipelines against fall-throughs and mitigating against mortgage down valuations, together with price-management conversations, are now more prevalent.”

Sprift’s data can be used in a number of ways, whether it be to generate market comparisons, create intelligent links to track the hottest prospects, or as a prospecting tool. “We always say that agents know their business best, so our job is to provide them with the tools they need to use in the way that best suits them,” adds Gilpin.

Marketing reports

Over at Dataloft, director Rory Black uses data to provide agents with up-to-the-minute reports on all aspects of the UK housing market, both at national and local level.

The aim is not just to provide negotiators with critical market intelligence, but enable them to reproduce that data in their marketing in a way that will demonstrate their breadth of knowledge to buyers and sellers.

If the market is a little bit slower and there are slightly fewer instructions, then we find that agents who are continually talking to their database will continue to do really well. Rory Black Director, Dataloft.

“It’s much better to have an informed opinion of the market and have some research and analysis behind what you are saying to people,” explains Black. “We help people cut through the noise in the market and create stories that agents can tell their customers.

“If the market is a little bit slower and there are slightly fewer instructions, then we find that agents who are continually talking to their database will continue to do really well. It’s about getting on the radar and then staying on it.”

Dataloft Inform produces powerful, in-depth reports for agents, backed up by graphics, that agents can white-label and use with their own branding. “What we help people do is keep that conversation going,” he adds. “They might take a market report or an infographic or a letter, or put some of our content on their website, so they are filling their marketing channels with insights about the market – things that are interesting and relevant.

“So when someone comes round to do a valuation they have a couple of agents in mind already, and that’s because they have kept in touch with something that is really relevant. It’s all about marginal gains; what can you do to make people think, ‘They are really knowledgeable agent with substance, I would like to talk to them’.”

Black points out that one huge potential untapped market for buyers are tenants, and suggests that in a challenging market, agents should target tenants with house price information from time to time. “At some point most people who are renting are going to buy, so sharing something with a tenant information about the sales market is opening a conversation with them so when they come round to buying themselves, that can be done really easily.”

These may be challenging times, but the worst thing agents can do is bury their heads in the sand and hope for the best. Focused, intelligent use of market data can put you one step ahead of your competitors, enabling you to take a slice of their business.

Mine your own data

We’ve dealt so far with companies which provide relevant data to help agents win instructions, but there is huge value in data you’re already sitting on. It’s just a matter of what you present to the contacts in your database and when.

BriefYourMarket is an award-winning business that provides an all-in-one, digital marketing suite, giving your agency the ability to pitch to the right people at the right time – contacts who you already ‘know’. “Clear, relevant, timely and high-quality communications help agents to stand out from the crowd,” says Chief Commercial Officer Richard Combellack. “BriefYourMarket has the option to target historic data to generate new leads from older, possibly untouched data, enabling agencies to see real value.

“Communications that track the customer’s journey, and provide help and guidance to select the right services, make their transaction as stress-free and successful as possible.” BriefYourMarket can achieve this with digital newsletters, emails and physical mail-outs, all from an easy-to-use platform, which houses your database.

Meanwhile print provider Ravensworth has seen a resurgence in demand for printed marketing materials to convey the message produced from data mining. “In recent months we have seen more demand for printed marketing such as door drops and direct-mail campaigns,” says head of sales Toby Howd.

In a world flooded with digital marketing, from emails to social media … people are feeling ‘digital fatigue’. There is something to be said about a physical piece of marketing. Toby Howd, Head of Sales, Ravensworth.

“In a world flooded with digital marketing, from emails to social media, there is a sense that people are feeling ‘digital fatigue’. There is something to be said about a physical piece of marketing that is tangible, something that directly puts a business into the hands of a potential customer.”

Ravensworth’s Door Drop service is proving popular with agents looking to run a print marketing alongside digital marketing. With access to 30 million home addresses, agents can target specific postcode areas to be really selective in their marketing efforts.

The firm also offers a web-to-print platform called Marketing Toolkit that allows agents to manage and print their own marketing campaigns, access comprehensive pay-as-you-go address data, target specific postcode areas, and identify specific types of properties and council tax bands. Pay-as-you-go data will also allow agents to canvass properties currently on the market with a competitor.

So whether you’re sitting on the answer in your own historical customer records, or buying in specialist data-crunching software solutions to sift out the prospects for you, data-driven methods of pulling in business from outside your usual reach are there to be exploited.

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