Around 50 per cent of landlords find their tenants through an agency. The other 50 per cent prefer to save the high agency fees and go it alone. But now there's another way: e-letting.
E-letting, which is fast maturing into a viable, stand-alone solution, allows landlords and tenants to do the whole thing online. The system aims to bring landlords and tenants together in one smooth operation, cutting out the middleman but also providing more security than going it entirely alone.
Landlords can find suitable tenants online and, for a fee, download lettings packs that contain tenancy agreements, reference checks, insurance and all the necessary paperwork to set up a legally valid tenancy. Advice and documentation for the tenant is currently free, which is why e-letting has already been phenomenally popular with this half of the rentals equation.
The system is simplicity itself for the tenant, who needs only to log on to an e-letting site to view potential properties. There is far more work involved for the landlord, who not only has to download and pay for all documentation, but advertise and describe the property, and supervise all viewings.
"It is certainly more work for the landlord than walking into a high street agency," admits Lisa Martin of Froglet.com, one of the pioneers of e-letting. "Froglet has no control over the quality of the properties, and tenants have to make their own choice from the pictures and descriptions available. Agencies insist on a minimum standard before taking a property on to their books, but with e-letting, you can't do that. With our service, the landlord advertises for a month for nothing, then the property comes off the site."
The biggest advantage for the landlord is that of price. "We reckon that by using e-letting, a landlord can easily save around £850 in letting fees a year, per property. Our most expensive pack, containing absolutely everything you need including a reference checking service, costs £110." There's also the advantage that e-letting can be operated at all hours. It happens immediately, even at three in the morning, and you don't have to wait to get the tenancy agreement.
Froglet.com, an offshoot of Leaders, one of the biggest high street rental agencies in the South-east, operates throughout England and Wales. LettingBrokers.com, which began life this year, will concentrate on London only. Co-founder Steven Constanti says: "We're from a lettings agency background and hope to appeal to the 50 per cent of landlords who don't currently use an agency.
"We can be cheap because, unlike a high street agency, our overheads are minimal. It's hard work updating the site every day, but that's about all the effort that is required. We are unique, I believe, among e-letters in that we will personally visit the property to be advertised. Our representative will talk the landlord through the letting business and advise where necessary.
"We offer a range of packs to download, and these cost from £40 to £75, depending on the documentation and services required. Landlords can put up to four photographs of their properties on our site."
So far, reports Constanti, e-letting is proving extremely popular with tenants, perhaps because it's completely free. Also most tenants, who tend to be quite young, are internet-savvy. The uptake has been slower with landlords, who tend to be older and more traditional in their ways, but, gradually, it's catching on.
At a time when so many internet property sites are going the way of other dotcoms, e-letting is still successful. Lisa Martin believes this is because e-letting offers a service that is unobtainable through other means, and the sites do not depend for their revenue on attracting advertising.
Martin says: "During September, we had 6,500 visitors – our most successful month yet. We are finding that the properties go quickly and that a good property can get five enquiries a day. As soon as the landlord advertises the property, it is instantly uploaded to at least five other property sites, so we are getting huge traffic. And because we are selling essential services to the landlord, we can keep going without outside advertising."
The downloadable packs from both Froglet and LettingBrokers are smart, easy to follow and comprehensive. They include gas check reminders, lists of dos and don'ts, sample inventories and safety lists. There are also helplines to ring.
What e-letting doesn't and can't provide is the neutral buffer zone between landlord and tenant that you get from an agency. When e-letting first reared its head more than a year ago, there were fears that it could develop into an unregulated free-for-all, with unscrupulous operators taking money for poor or non-existent services.
So far, though, these fears appear to be unfounded, possibly because successful letting is a highly complex business and only those already experienced in the industry would understand how to set up workable sites.
The Association of Residential Letting Agencies (Arla) has not given its blessing to e-letting, mainly because the service cannot qualify as an agency. Although e-letting is unregulated, visitors to sites should look for the Which? Webtrader logo – a sign that the site operates professionally.
E-letting may be seen as a viable and cheap alternative to the high street agency, for those who are prepared to put some effort in. But its operators believe that it will never entirely replace the walk-in agency, as most landlords and tenants will always prefer this safeguard.
But, with the rental market set to grow significantly over the next few years, it offers yet another choice.Reuse content