Press Releases

The challenges facing letting agents and landlords in 2010 and how the right software can make all the difference - January 2010

The lettings market in 2009 increased dramatically, as new entrants to market set up business. However, that has brought with it, a whole new set of challenges facing letting agents and landlords in 2010.

The Rise Of The Micro Agent

We will continue to see the rise of the micro lettings business in 2010, with many new companies opting to work from a virtual office without any high street presence.

These new agents have quickly grasped the importance of their online marketing, making use of social networking tools such as Google Keywords and search engine optimisation to ensure that their business is found quickly from the 70%+ home movers that look online first when searching for their next home.

I believe that this activity will force more traditional lettings agents to 'up their game' in marketing and advertising their business more aggressively, but for better value - advertising on selected portals could deliver better leads for less money compared to traditional regional print advertising.

The influx of new agents also means there is a competition on fee prices also – new agents are keen to build up their portfolio, so are reducing fees and costs to attract new business. However, this could also mean lower standards in customer care and service, resulting in short term business wins but poor long-term business relationships with landlords.

If more established agents try to reduce fees to compete with new businesses, longer term cash flow problems could occur – if your business has traditionally won clients despite being slightly higher in fees, but backed by a high standard of service, you need to make sure that you market this point well. Landlords won't necessarily mind a slightly higher fee if the support network is in place for them.

The Increase In Housing And Tenant Demands

As we all know, many home owners have been unable to sell their properties in the current market conditions and have become reluctant landlords, causing a shift in supply versus demand in property.

Repossessed properties have also flooded the market, so there is a large influx on to the rental market. This increase in supply is not met by an equal increase in demand; hence there is a downward pressure on rents.

Coupled with this, tenants are becoming increasingly demanding due to the increased choice in property available to them, meaning that the standard of property conditions needs to rise in 2010. Tenants will no longer tolerate shoddy conditions in rental properties from agent A when agent B is offering a much higher quality property for a reasonable price.

Unfortunately, there could also be a continuation of the static property market due to lack of available finance, reducing professional landlords' ability to expand portfolios. The reduced availability and access to finance could also impact some agencies' growth in 2010.

Tenancy Deposit Scheme

New tenants and agents are also finding the Tenancy Deposit Scheme hard to get their heads around since its introduction in 2006, with some scheme staff seemingly not fully understanding the legislation.

The Scheme requires letting agents to register the deposit at the start and end of all new tenancies with the Department of Communities and Local Government. If a tenant's deposit is not registered with a scheme within 14 days, the tenant can legally demand three times the amount of deposit in compensation.

Agents are also inheriting deposit shortfalls from landlords or agents who have left the market, where landlords with poor financial management skills decide to sell up and leave the market. Other investors may end up purchasing a tenanted property with no tenancy deposit in place. In addition, there are cases in the public domain where agents have gone out of business, having spent hundreds of thousands of pounds worth of tenants' deposits and in some cases they've been imprisoned. This leaves the landlords liable for the deposits and in many cases, other agents then have to pick up the management of the property.

There is also a real potential of having to raise standards even further in 2010, due to the likely introduction of agency licensing, currently under Government discussion, potentially resulting in agents adjusting their working practices if necessary during 2010.

Good software should ensure that legislative compliance is taken care of, easing pressure on agents with one less thing to worry about and taking away the routine administration, freeing up time to deal with more complex enquiries and providing better customer service. I would encourage agents to invest in good software and training to help make their business a success, whether it is a new start-up or established agency.

C.A.R.L. Communications, a highly acclaimed residential lettings and property management software package, is offering existing customers the opportunity to save over £150 off an additional user licence, reducing the cost from £350 +VAT to £199 +VAT if purchased before April 2010.

C.A.R.L. (Computer Aided Residential Lettings) enables agents and landlords to discover the benefits of a streamlined working process through one simple to use application, aiming not only to save agents time and money, but to remove unnecessary stress caused by disorganisation.

The training solutions offered by C.A.R.L. also exceed the market standard. With the majority of regional trainers having managed or owned their own lettings businesses they can offer professional advice along with comprehensive training on the software.

Throughout 2010, C.A.R.L is also offering all clients a free, on-site system health check, which usually costs £250.00+VAT. The review, undertaken by one of C.A.R.L's professional trainers, provides the perfect opportunity to examine every aspect of the C.A.R.L. system, from registration of landlord and property details, to marketing and advanced account management.

To take advantage of these offers, please contact the administration department on 0845 3455591 or alternatively email admin@carlcomms.co.uk.