Here’s what you need to know
Figures last week from Knight Frank’s annual report showed that nearly one in four households in Britain will be renting privately by the end of 2021, as climbing house prices and stagnant wages increasingly make home ownership an unrealistic dream for many.
Approximately five million households are in private rented accommodation, a quarter of these are families with children. It is predicted across the course of the next five year, this will rise to 5.79m (or 24 per cent of the total), alongside 4.3m social tenants and 14.3m owner occupiers.
Why is this hugely significant for rental market players?
Not only does it make the removal of letting fees even more important so that renters (all 5.79m by 2021) are not being ripped off, but it hugely highlights the need for better customer service from agents and landlords (40 per cent of renters pay more than 50 per cent of their incomes on rent).
The lettings industry is notoriously known for greedy behaviour and numerous customer service fails. It needs some serious shifting internally (structurally and technologically) for it to be fit for purpose if it is to serve this increasing population. A makeover in the public’s eyes can only come after the structural issues have been addressed and solved.
Both Conservative and Labour parties seem to agree on the fact that banning letting agents’ fees to tenants needs to happen. The worrying thing is, if things stay the same, all that will happen is letting agents will offset the fees on landlords, who will increase the rents on tenants to cover the expense. They will continue to offer the same old and dusty services that don’t fit the public’s needs. We can’t let 5.79m tenants lose.
For better or worse, it’s obvious we are stepping into a new era of housing. If you look at businesses like AirBnB, it’s easy to imagine how technology can be used to reform an industry that for too long has been overpriced and underserviced.
The bad news is this industry clearly has an interest in protecting its income sources, and is resisting tech-driven innovations designed to ‘disrupt’ its work. The good news is, there is a lot of new blood around doing exactly that. They, as well as tenants and landlords on the other side of the fence, are already winning.
For more information please see No Agent’s website.
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