PROPTECH-X ‘Proptech & Property News’: NRLA | Agents Working from Home | Strike

In today’s news, Andrew Stanton discusses the NRLA’s calls to back a hardship loan, the viability of a work from home estate agency, and Strike’s free estate agency.

Daily bite-sized proptech and property news in partnership with Estate Agent Networking.

NRLA wants the Chancellor to back a tenant hardship loan

The National Residential Landlords Association has called upon Rishi Sunak to create a loan scheme to act as a safety net for tenants at the bottom of the income ladder. Specifically, the tenants who do not fit the criteria for means-tested benefits. 

Throughout the pandemic, the NRLA has been very vocal about the need to help tenants and landlords and the hardship that the pandemic has caused.

The Chancellor has of course been looking after the residential sales market by changing the tax rules around SDLT, but he seems less willing to focus on those in the lettings sector.

At present, it is estimated that just under 10% of tenants in the private rented sector are in arrears, a blow to both tenants and landlords.

In a recently published end of furlough briefing titled ‘Tackling the COVID Rent Debt Crisis’,  the NRLA states the following:

“Private renters and landlords across the country now face a cliff edge as a result of the end of furlough ending alongside cuts to benefit support. 

The Bank of England has noted that renters are more likely than any other group to have lost their jobs or been furloughed whilst the Government admits that many landlords are highly vulnerable to rent arrears.

This report highlights growing concerns about the impact that a failure to tackle COVID related rent debts which are affecting almost one in ten (over 800,000) tenants will have on their ability to remain in their homes and the damage it will cause to their credit scores. 

By the Government’s own admission, private renters have been one of the hardest hit groups by the pandemic. The proportion of renters in arrears tripled from 3% in 2019/20 to 9% in November / December 2020 [1]. In stark contrast, as the Government notes, “mortgage arrears have returned to pre-pandemic level,” whilst the proportion of social rents in arrears has not changed during the course of the pandemic. 

Additional research for the NRLA has found that of those in the private rented sector who, since lockdown measures started, have built arrears which remain to be paid off, 82% were not in arrears prior to the start of the pandemic.”

Will Rishi Sunak act now or will he look the other way and allow a big problem to grow bigger as the end of furlough and winter looms large?

Will the work from home estate agency model get a kickstart?

Shock horror, the government is going to look into the legitimacy of changing legislation around a person’s right to work from home from day one of being an employee.

According to our sources, on Thursday 23rd September the Department for Business, Energy and Industrial Strategy will be publishing a consultation document on this topic.

At present, employees have to be working in an organisation for at least six months before they can ask for a more flexible working arrangement. True, an employer does not have to say yes to a flexible approach to work if requested, but the fact the government is looking into the matter indicates that work from home is not a fad but a new post-pandemic reality.

Looking at the current state of bustling office hubs, most evidently the City of London, it is clear that a substantial change has occurred.

Does any of this relate to the estate agency sector in the UK, which has around 80,000 frontline workers? In short, yes it does. Spending hours in an office environment looking after clients or being face to face with a team can’t be done as effectively from a remote location.

Do tenants walk into lettings agencies to get a rental? According to data, 27% of lets in a one-year period during the pandemic were to tenants who had not physically viewed the subject property.

Do buyers and vendors go to branches anymore? Buyers attend viewings and vendors meet prospective partner agents at the property that is to be sold, so the physical branch seems moot.

Given the huge churn of personnel in the UK real estate sector, 40% every 18 months, maybe a greater number of employees stationed at home would lead to a better work-life balance, lessening the huge cost of recruitment. 

Thirty years ago if someone asked any agency head if they’d run a team not based out of a branch, many would’ve called it madness. Yet now, with the reach of technology, the power of cloud computing, and 5G finding its stride, sales teams do not need to be physically sitting in the same environment to carry out the complex moving parts of the daily routine.

It will be interesting to see if the government does back the right to work from home as a basic right from day one, but in some ways, the decision has already been made by the nation.

How FREE is the Strike estate agency model?

Strike CEO Sam Mitchell

Strike’s business model is built around the concept of getting homeowners moved with zero payment required. According to Strike, they say that the usual agency model of paying fees to agents in return for work done is well an outdated proposition.

As they say: “Welcome to that sell-your-home-for-free feeling. Strike is here to redefine the way you move. After 200 years of high fees and pointless jargon, the industry needs a change — and we’re the ones changing it. We bring together local expertise and technology to make moving easy. And free.”

So if they operate in your area, you can get a free ride to a sale. This sounds really generous. But how free is it really?

Glancing at their site, you’ll see that for just £699 you can get accompanied viewings on top of the free service.

If you were to pay out another £499, you’d get a video thrown in, and you’d also be listed on a property portal. 

All of a sudden that “sell-your-home-for-free feeling” is starting to feel a lot like pay the bolt-on costs upfront unless you want your sale to disappear into the ether.

These add on services are typical offerings of estate agencies throughout the UK, rather than peripheral goodies. They are a core part of the process, without which things are made very difficult. 

Of course, the sale through Strike isn’t free. It’s buried in the upsell. Maybe the no sale no fee model that’s worked for 200 years of estate agency has some merit after all.

Andrew Stanton is the founder and CEO of Proptech-PR, a consultancy for Founders of Proptechs looking to grow and exit, using his influence from decades of industry experience. Separately he is a consultant to some of the biggest names in global real estate, advising on sales and acquisitions, market positioning, and operations. He is also the founder and editor of Proptech-X Proptech & Property News, where his insights, connections and detailed analysis and commentary on proptech and real estate are second to none.

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