By Shareq Husain, VP and UK general manager at Residently
Emerging out of the 2008 financial crisis, the fintech revolution disrupted the way we bank forever. Consumers were ready for faster, automated and more convenient processes, and the traditional banks found themselves sidelined as new fintech innovations made millennials’ lives easier.
People were opened up to a new world of consumer-focused payment services and digital banking options that offered more efficient ways for them to manage their money, instead of relying solely on the big banks. Years on, their popularity continues to rise with the deVere group reporting a 72 per cent increase in the use of Fintech apps in 2020 alone.
With widespread fintech adoption, the bigger banks found themselves pressured to compete with these innovative offerings. As a result, they began implementing consumer-friendly products to improve the personal finance experience for their customers, and remain competitive against the likes of Revolut and Wise.
So, why can’t the rental market do the same? The sector is calling out for an equally impressive, consumer-centric revolution for renters.
Reimagining renting
When it comes to renting, the consumer faces a market riddled with outdated legacy processes that have no place in the 21st Century – from outdated sales structures, time-intensive referencing, and poor communication from landlords and managing agents.These complex and outdated processes are well embedded among industry leaders and changing these time tested processes, however inefficient and unpleasant they may be is a daunting idea for many.
Disruption is always uncomfortable, but the promise of a transparent and flexible digital experience for today’s renters is outweighing the desire to stick with the status quo for many of the more progressive property leaders.
To truly tackle the inherent issues in renting, perceptions must change. Currently, much of the sector considers the landlord to be the primary customer rather than the renter, meaning renters’ experience is often sub-par as their needs get overlooked in favour of the immediate commercial imperative.
With perceptions of the customer warped, the renter faces inefficient admin processes including time consuming referencing and employment checks that they’ve likely completed numerous times before, despite having a perfect record. Additionally, without a renter-first approach, renters find their priorities for flexibility and homeliness fall to the bottom of the list, allowing them to have very little voice on how they customise or furnish their home.
Renters are drawing the short straw despite being the ultimate end user, paying high rents for average properties, poor quality furnishings and a stress filled customer journey. The often difficult or altogether avoided conversations and negotiations with landlords can lead to further frustrations and points of tension for both sides.
What if this could be changed through technology to ensure all parties benefit? One where landlords and letting agents experience is made easier through a new business model, while renters enjoy the flexibility of renting alongside the benefits of home ownership – and without the maintenance costs.
Borrowing solutions from fintech
The idea of renting long-term often comes with a negative stigma, with many perceiving it to be complicated or providing poor value for money over time. However, we are seeing a move towards usership over ownership as millennials reassess their priorities. With many realising that it’s now possible to work from anywhere, there is huge demand for flexibility and convenience post-pandemic. Renting allows those seeking more freedom in their lives to move around frequently and enjoy a flexible lifestyle without the burden of property maintenance costs that come along with buying. However, these benefits often get overlooked because of poor rental experience.
To improve this the rental industry must innovate to become digital-first. The pandemic proved that it is possible for any sector to rapidly evolve, with most businesses across the UK, including estate agents, forced to go online for the past year. So why go back to outdated and admin-heavy processes in renting post-pandmeic?
Virtual viewings became the norm during lockdowns, and with improved technology in virtual reality (VR) and Light Detection and Ranging (LIDAR) technology in the latest iPhones it’s now possible to build a virtual 3D model of a property on your personal phone. We’ve seen that virtual viewings save the time and cost that comes with wasted in-person viewings, and allow residents to get excited about a property online before they view it.
In addition, applying fintech innovations to the referencing and payment process is an easy way to reduce unnecessary paper-based contracts and referencing. In fact, we work with world-leading payment providers such as Stripe to bring these innovations to a property world used to reconciling bank transfers manually against spreadsheets. Instead, renters feel their payment experience reflects what they’re used to on other everyday platforms.
These are just two instances of where digital innovations can also help agents access a wider pool of potential renters, allowing people currently overseas, for instance, to view and make an offer on a potential rental before they arrive in the city.
Freedom in the customer experience
Agents and property managers can further enhance customer experience digitally in other areas too, for instance by allowing in-app choices for move-in dates, ensuring broadband and utilities can be set up in advance, creating options for furniture packages, offering cleaning services, and more.
We often perceive home ownership as providing freedom to customise the home, however the rental sector can and should be able to provide the same benefit. After all, renters should have the authority to customise and redecorate with minor adjustments to make their rental feel like a home too. By providing an in-app service for customers to explore redecorating and furnishing, the landlord benefits from a cost-effective upgrade and the renter creates a space that truly feels like home.
Homeliness is extremely important to renters, yet their needs are still overlooked. Consumers are out for a digital experience that acknowledges their perspective, something practical, personal and professional; a solution that offers flexibility and convenience with all-important customisations. It is now up to the rental market to listen to consumers’ priorities and innovate based on their needs.
Squashing renter-first myths
There is often a misconception that being renter-first means the landlord entails a cost or burden – this simply isn’t true. With renter-first technology, the economic model for property investors and owners is re-established – enabling them to maximise their yield with minimum hassle as all viewings, paperwork, maintenance, and renewals are taken care of without any unexpected fees.
It’s now time for the market to overhaul the existing renting experience by making the renter the customer and changing the process entirely. If Revolut can change personal finance, Uber can revolutionise the way we book taxis, and Airbnb can modernise the short-term holiday letting sector, the same can be done for renting. Press a button, make it your home.
Crucially, if we are to see fintech-like disruption within the renting sector, the market must re-evaluate its focus and work collaboratively to make the industry renter-first, with a more customer-friendly and supportive experience from day one of the rental lifecycle.
