Buy-to-let landlords are moving to the web to market their properties, deserting the high-street letting agents for online agents offering much cheaper services.
The trend is being driven by tenants, who tend to be young and tech-savvy. The vast majority of tenants (estimates vary between 70 and 80 per cent) now search for new places to live almost exclusively on the web, particularly on the huge websites that carry adverts from most of the letting agents, such as Primelocation and RightMove.
Many hands-on landlords would like to cut out letting agents entirely but are excluded from dealing directly with the property portals, which accept ads only from professional agents. The reason given by both the portals is that only agents are regulated by the Property Misdescriptions Act, despite the fact that the Act does not apply to lettings. The real reason seems to be that they do not want to offend their big clients.
Faced with the need to use an agent to get exposure for their property, landlords are discovering that big savings can be made by using purely online agents, unencumbered by expensive high-street premises.
According to Adam Day, a former high-street estate agent who founded Hatched.co.uk nearly a year ago, online agents can offer a better service than their shop-based equivalent at a fraction of the cost.
"Lettings have always been seen as the poor relation, but we treat them exactly the same as sales, so landlords get a floor plan, photographs and a full description of the property," Day says. "Landlords can't believe it."
Day has seen a big increase in the number of landlords who come to Hatched.co.uk, which is physically based in an office in Hitchin, to get tenants but not to manage the property. "We are getting an awful lot of people from London buying new flats at a development here, but none of them wants management services," he says. "Now, about 40 per cent want a let only."
For a let-only deal, Hatched.co.uk charges a launch fee of £50, plus 20 per cent of the first month's rent, against an average of 60 per cent on the high street. Both fees exclude VAT.
Because the ads are online, landlords can also use animated graphics, such as virtual tours, to promote the property. They also get their own mini-website to check how many people view their virtual property.
Mark Applegate, proprietor of The Lettings Network in south London, became an online agent by accident. "When I bought the company we had an office in Bromley, but they wanted to put the rent up so I started working from home," he says.
"My ambition was to get a high-street presence but as we went internet-based we could reduce the fees substantially."
Applegate now operates from a converted ground-floor bedroom in his house, and is franchising the operation to cover neighbouring areas.
"About 70 per cent of landlords prefer to take our introduction-only service and manage the properties themselves," he says.
Ads are placed on the major web portals, including RightMove and Findaproperty, and also in the local newspapers.
Working from home enables him to offer a very personal service. "I start to recognise my landlords' voices so they don't even have to identify themselves when they ring," he says.
The introduction-only service costs three weeks' rent, and full management costs 10 per cent, including inventory management and insurance.
The major concern about online letting agents is how to judge their probity and reliability, in the absence of a swanky office in a prominent location. Landlords are advised to check that they are members of a trade body such as the Association of Residential Letting Agents (ARLA) or the UK Association of Letting Agents (UKALA). If their service includes taking deposits, they must be a member of one of the tenancy deposit protection schemes.
www.hatched.co.uk (covers Hitchin, Hertfordshire)
www.thelettingsnetwork.com (Bromley, south London)
www.oliverfinn.com (Chiswick, west London)
www.easyletweb.biz (Cardiff)Reuse content