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ARLA Propertymark: 2017 – what lies ahead?

Posted on 2017-03-07

Although we’re one quarter into 2017 already (and it’s flown by!), it’s still not certain what the rest of the year will bring for the lettings industry.

As always, there are opportunities and challenges emerging in our sector, which are covered widely by the media – political changes, supply and demand issues and focus on the state of the housing market to name but a few – but we don’t often see the views of those working on the ‘front line’.

ARLA Propertymark spoke with agents to ask their views on what the burning issues are likely to be in 2017; read on to see what they had to say.

Toby Leek, Sales Manager, Laurent Residential

Technology and innovation

“There is a huge amount of money going into ‘PropTech’ (companies using technology to improve services used within the industry to buy, sell and manage property). It will be really interesting to see what comes out of 2017. We’ve seen a lot this year in terms of virtual reality headsets and the ability to book various appointments online.

“Software that allows people to book appointments and get updates – even outside office hours – is going to be more commonplace. Video tours are becoming more popular but they are certainly not a substitute for a good agent; rather a tool for an agent to use.

“We’re seeing substantial investment being put into streamlining a lot of the processes; for example, online signatures and online mortgage brokerage, which should hopefully make the industry more efficient.”

Competition and differentiators

“Some high-street agents don’t appear to be taking the advent of online competition as seriously as they should. I personally think that online agents are here to stay, so they should certainly be taken into account as the industry evolves.

“There are so many benefits that high-street agents can offer that online agents can’t. For me, the face-to-face contact with all my clients – which involves not just calls, but weekly meetings to discuss activity and the market – is so important. If you’re not local, you’re not able to have that same contact or level of service.

“If you’re good at what you do, you should be ingrained in your area, because that builds your knowledge of sales, competition and prices, which enables you to advise your clients accurately.”

Process and legislation

“The political landscape in 2017 is an interesting one, and not just because of Brexit. We’ll also see the result of the US election playing out and possible interest rate rises.

“There will be other factors, including the ‘wear and tear’ allowance and the changes to tax relief for landlords on mortgage payments.

“This will have a direct effect on the buy-to-let sector and may mean we see more investors looking to sell or increasing their rents to compensate. With the increased Stamp Duty on additional homes, it could mean first time buyers have less competition when looking to buy.

“There are always challenges in our industry but it would seem there are more now than I have ever seen in my 14-year career. In my view, you have to prepare as best you can, embrace the changes and tackle them head on. Set out a plan, review frequently, adapt when necessary and have direction.”

Opportunities and challenges

“It’s going to be quite a challenging year ahead. I believe stock levels will be tight and it’s going to be extremely competitive in terms of what’s out there. We’re in a very competitive industry anyway, but a lack of stock makes it that much fiercer.

“You have to use what you have at your disposal as efficiently as you can. Maximise every opportunity, connect with your area. We do a lot within the local community, volunteering in our own time. It sets a standard for you and your company, but also local residents appreciate it. They see you putting time into making the area better for everyone.”

Tom Lefek, Lettings Manager, Nicol & Co.

Technology and innovation

“It’s very much about using the technology and tools that are available in order to meet expectations of the client.

“We’ve moved on from the era when we advertised only in newspapers. My agency stopped advertising in newspapers a year ago.

“What we’re concentrating on is social media. Our Facebook page is very popular and you can see communities getting very involved. People are very interested in what’s going on in the market, commenting on and sharing properties. We also produce newsletters for the community, discussing what has happened in terms of recent sales in a particular street. We deliver that to clients so they can sit down and read about what’s happening.

“We run a net promoter score. Some people can be very scared of that because you might get a lot of complaints. People worry about how they’re going to be seen. But it’s paramount to know what clients are saying about you, and what they’re expecting you to do.”

Competition and differentiators

“We recognise online estate agents but we don’t treat them as competition. In my opinion they’re just two different business models – one cannot compete with the other. No matter how hard online agents try and copy or deliver the service high street agents provide, they wouldn’t be able to do that because they’re not based locally; just like if high street agents tried to match the prices quoted by online agencies, that wouldn’t be good business, due to our overheads and other factors.

“But you have to change because trends change, and people’s expectations change. You need to adapt. If you don’t, there will be another company that will. That’s where real competition emerges.

“As high street agents we can recognise these trends because we talk to the people, we meet them in our office, or the local shop. Online agents can’t do that. They can send a survey but it’s not the same.

“The very bottom line of what we do is the relationship that we have with the client and with the community. The key is to manage that relationship and allow it to grow. If you’ve established that relationship and are looking after it then I’m very confident that the management portfolio of an agency will increase.”

Process and legislation

“The main considerations are Article 50 and starting the process of Brexit. But Brexit itself is not the concern – it’s how investors are going to react; what impact it will have on investors and whether building societies will still be happy to lend at current rates.

“It will be interesting to see how this will develop. There could be a risk of interest rates going up because of a lower pound and the prospect of higher inflation.

“The ban on letting agency fees has been announced, although it probably won’t happen until at least October 2017. Nevertheless, that will have a huge impact on the income of a lettings agency. It will be important to look at other sources to see what can be done to recoup that fee, or find some other services that can be delivered to the client.”

Opportunities and challenges

“We need to recognise what people desire, then meet their expectations. Everybody knows that trends change, but what never changes – according to surveys with landlords and tenants – is that people are always disappointed with levels of communication.

“Investing in software may be expensive but it has the ability to free people up. Rather than taking a day for one employee to type up emails to all your clients, it can be automated in seconds. That employee can then concentrate on making physical contact with clients, which is more in line with their expectations.”

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