Home Property Zoopla/Rightmove dominated rental market is broken

Zoopla/Rightmove dominated rental market is broken

23rd Feb 24 1:20 pm

The UK’s rental market is under severe pressure. Demand far outstrips supply, with the problem most acute in London. There is such a shortage of rental accommodation in London that landlords and letting agents are receiving over 25 viewing requests per listed property.

Compounding this challenging situation in London and across the UK is the poor logistics and worsening communications among the key actors in the market: tenants, landlords and above all estate agents who have to cope with the sheer volume of enquiries.

Digitisation has swept through sectors and economies, and it could also help address the fraught situation in the rental market. The key is improving communications between prospective tenants and estate agents.

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Currently, this is based on swapping texts on mobile and emails, when what’s needed is far more instantaneous communication, which matches what the ‘WhatsApp Generation’, who are the core of the rental market, want and what next-generation platforms such as krispyhouse.com can deliver.

London rental market is extremely tight

Renting a flat or house in London has never been more difficult. The market is tight, supply is limited and demand overwhelming. This is illustrated in the recent surge in demand across the UK, which currently stands at 33% above the five-year average, contrasting sharply with the 10% below-average demand seen in 2022.

True, the capital’s rents are beginning to fall, but are still much higher than the national average. Although rents are due to rise a little more slowly in London than in the rest of the country – 2% and 5%, respectively – the capital’s market is broadly following the national trend in one crucial respect.

This is the sharp increase in demand which has led to the number of viewings in the UK tripling from 2019, with Rightmove recording one of its busiest periods on record in 2023. Some industry forecasters even predict that in twenty years’ time the majority of UK residents will rent their homes.

A failure to communicate

This huge increase in viewings of course presents a big administrative task for London’s estate agents. But current communications tools are making this a much harder task than it needs to be. Communication is, of course, at the heart of the estate and letting agent role.

But the main digital platforms, such as Zoopla and Rightmove, do not have any kind of built-in communications function, and so rental communications have become highly disjointed. Contacts and correspondence get lost; enquiries can be ignored; pertinent details are forgotten; and the whole task of juggling all the necessary channels of communication with multiple prospective tenants becomes very difficult.

This has commercial effects too. If the capital’s estate agents cannot communicate effectively with tenants and other parties, then this stalls market activity, leading to higher costs and a lower volume of transactions.

Proptech can provide the solution

Current proptech innovations are mostly confined to ancillary services such as digital viewings and digital inventory management – all useful in their own way, to be sure, but not as important and elementary as communications between letting agents and tenants.

Part of this issue is that, traditionally, the only two ways of connecting with an agent would be to make a call or send an email, when, in fact, 72% of consumers prefer texting over calls. Also, millennials, aged 20 to 40, are the core of the rental industry. In their social lives, they rely on platforms such as Tinder and Bumble, which are known for their quick and personalised communication methods, while in their professional lives, they rely on LinkedIn, which also has instantaneous communication.

A digital platform, such as krispyhouse.com, offers a dating style service. Instead of managing various channels separately,  krispyhouse.com’s new website and app offer direct messaging and calls for tenants and their intermediaries on the platform and notifies them of newly available properties that are suited to their requirements.

Following this, tenants, agents, and landlords can be quickly connected anonymously, as the platform does not require the use of personal mobile numbers. It also offers letting agents access to a fully integrated CRM system, instant communication, and unlimited advertising, making their lives easier and better.

Cost is also a factor. Players such as Zoopla and Rightmove charge a monthly fee of £700 to £900, which can be prohibitive for smaller agencies. krispyhouse.com aims to increase accessibility, offering a free download and a planned monthly fee starting at £100, which is particularly helpful for these independent agencies.

New technology cannot, on its own, solve the housing shortage in London and the Southeast. But it can ease communications and facilitate transactions – which is after all the bedrock of any successful market.

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