The residential letting space is changing faster now than ever. I have been an agent for my entire working life, I won’t say for how long, but I have been the Head of Lettings at Webbers for going on ten years.
As a company we have always considered ourselves as forward thinking, if something catches our eye as having a potential positive impact on the company, we are fast to test and implement. And this is not only this new world of proptech, we constantly explore new ways of working, thinking and improving existing processes.
One such area that popped up from nowhere is the world of deposit alternatives.
I was pretty certain when I first heard about them that I wasn’t a fan. But we can’t hide from certain facts in our industry – legislation will change, more often than not to suit the tenant, because after all, there are more tenants than agents – so whose vote is more important in winning elections? The tenant fee ban is a prime example of just that.
To stay in the game, we have to adapt. At Webbers we used to take a deposit of six weeks rent and, in some cases, a bit more to cover pet owners.
The fee ban changed that, capping things at five weeks, without any consideration for each property or tenant’s situation something that concerned us, as I am sure it did a lot you who are reading this.
Frankly, it reduced security for landlords.
We needed to look at alternatives, ones that, again, I would have dismissed without a thought previously. But I started doing my research.
Do the reading as I don’t think anyone, particularly in our industry, should rush into decisions like this. We are directly responsible for advising our landlords and tenants. We are trusted with such a huge part of their lives – the landlords’ incomes and the roofs over the tenants’ heads. Team Webbers and I explored three of the main offerings, speaking to providers and our friends across the industry.
First and foremost was finding something that protected out landlords for longer than five weeks whilst remaining 100% compliant by the law and protected by the vitals, FSCS and FCA regulation.
It might surprise you, but that means we could instantly shorten our list. We also needed to know what happens at a check out if the tenant hasn’t paid a deposit? A question I have seen time and time again on the oh so friendly forums we have in the trade.
We found a team with a solution that works with the tenant, has the right insurance backing and reassured us that we can protect our clients’ interests in the event of end-of-tenancy issues. Ideal.
One of my biggest learnings was remembering how to keep an open mind; it has been a while since I have had to engaged with something I was against and research it.
We became aware that there was a potential commercial gain to be made for both the agency and landlords offering such products as a choice.
So far it seems we were right, with a deposit replacement offering there has been shorter turnaround times for sales teams and about a 50% signup rate that we expect to grow to around 75% over the coming months.
Not having to stump up that vast sum seems to be an attractive option to many, not just in the lower end of the market; uptake has been strong across the board.
Don’t blinker yourself from the new things out there but do take your time and do your due diligence, you never want to lose trust from the landlords and tenants, but there might be opportunity out there for all.
And if you are a technology provider similar to that of Reposit, which we ended up going for, feel free to get in touch – but remember that for all of us on the agency side, time is a precious commodity and to stand out from the crowd you need to reduce costs, create incomes but above all improve efficiency by saving time.