The Government’s attempt to regulate the lettings market via the Renters’ Rights Act will ‘backfire’ in the long term, a growing property software firm nearing 10,000 properties under management has said.

Ilia Drozdov (main image), who runs property software company Dwelly, tells The Neg that “inhibiting the free market will in my view always hurt the customer – i.e. the tenant – in the long run”.

“Of course I understand why they want to regulate the private rented sector more, but I don’t think the legislation will produce the results that the Government is hoping for.”

Drozdov says one aspect of the Act – stopping bidding wars – puts his company in a ‘good position’ because it’s AI tech is best placed to work out ‘fair value’ within the market and therefore set a realistic asking rent prior to marketing.

Disruptor

He also claims that Dwelly is going to disrupt the market significantly and that his firm will overtake more traditional competitors such as LRG and Dexters within two years, something that will raise eyebrows in many corporate boardrooms.

“I believe this is how the market will evolve as the industry consolidates and more and more smaller and medium-size agencies sell up or offload their lettings portfolios,” he adds.

“We are on track to have 10,000 properties under management next year, so this trend has already begun.”

Recent acquisition

A case in point is Sheldon Bosley Knight, which this week sold its lettings book to Dwelly for an undisclosed sum, albeit trading under its original name.

While international stock markets have wobbled recently as AI’s real potential has been questioned, and Rightmove’s first toe-dipping into AI wasn’t well received by investors, Drozdov nevertheless says the tech will soon radically change the way tomorrow’s big estate agency groups are run.

“Everyone assumes that that platforms like ChatGPT can be integrated into a property firm and although it can drive some efficiencies, the true potential of AI for the property industry will be seen when it’s embedded into businesses and begins learning how they operate from both previous and current operational data – for example how a company onboards tenants – and then begins doing it for real,” he says.

“The better the data, the better your own AI system will be able to solve real-world landlords, tenant and home moving customers problems.”