Why Online Letting Agents Are Better Than The High Street

Letting agents are an integral part of the rental process and perform essential roles of listing your property on the rental market, finding new tenants and managing any paperwork.

As a landlord, you have the choice between high street letting agencies and online-based agencies. While traditional high street letting agents have undoubtedly led and built successful strategies to finding new tenants, these services often come with a substantial price tag.

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This is where new alternatives, such as online-based agencies, including Mashroom, may prove more affordable and effective.

This article will clarify the ins and outs of what letting agencies do so that you have a better understanding of the rental market’s inner workings and can make an informed decision on what type of agency to choose.

But first, what is Mashroom?

Mashroom is an online letting platform that empowers landlords to let their property without an agent. It works in the way many online letting agents do, in that it allows you to list your property on Rightmove and Zoopla (and with Mashroom it’s free).

Mashroom also offers a number of other benefits, such as:

• Easy to use property management tools
• Free same-day rent collection and payouts
• Maintenance management built in to the platform, with access to 7,000 contractors
• Human support

You can advertise your property and manage your tenancy with Mashroom for free; our costs are covered when you purchase optional additional products, such as EPCs, inventories, insurance and mortgage advice.

If it sounds like it’s for you, you can learn more about Mashroom.

Tenancies vary in nature depending on the contract signed between tenant and landlord. The most common type of tenancy in England and Wales is called the Assured Shorthold Tenancy (AST).

What do letting agents do?

Letting agents have a good understanding of the rental market, letting processes and laws. Agents work directly with both the landlord and the tenant and provide an appropriate support structure and communication pathway between the two parties.

Before starting a formal relationship between the landlord and letting agent, the landlord’s degree of involvement must be determined regarding the property’s management.

Letting agents can have different levels of involvement. Letting agents have the primary task of finding suitable tenants for the property.

• The ‘tenant find’ service is the most basic service, including arranging for professional photos to be taken, obtaining a floor plan, and collecting any other relevant details that need to be in the property listing.
• Some agents will also take on the property’s viewings, carry out all the required tenant background checks and draw up an appropriate tenancy agreement.
• At times, agents will also suggest the property’s rental price, using local market trends and prices of similar properties in the surrounding area. The aim is to provide prospective tenants with an affordable and reasonable figure that also creates sufficient revenue for the landlord.

These matters aside, letting agents are responsible for many other aspects of a tenancy of a private home. Before offering their services, letting agents must be registered with one of three government-approved letting agency redress schemes that set out a code of conduct. Once registered, agents are free to offer general or specific guidance to landlords on tenancy processes and agreements, as well as any legal obligations.

Letting agents are also responsible for appropriate and effective property marketing, including setting up property viewings with the targeted tenant demographic. More extensive responsibilities also include credit checks, inventory, property inspections, maintenance and repairs and deposit dispute handling.

The fees landlords pay depends on the type of service they choose.

• For a tenant find service, agents will generally charge the equivalent of a month’s rent.
• A more all-encompassing service will usually cost between 7% and 20% of the monthly rent, which does not necessarily include the initial administrative ‘set-up’ fee. These charges will almost always be higher for urban properties.
• Basic services usually come with a fixed price that is agreed upon between landlord and agent.

With the emergence of online letting agents and platforms, the service cost of finding tenants has significantly decreased. Through intermediary platforms such as Mashroom, a property can be listed on letting websites such as Rightmove and Zoopla at a fraction of the original cost.

This does not mean that landlords can entirely circumvent online agents as letting platforms require the property to be listed by a registered agent.

Letting agents in different cities

A letting agent’s reach is often limited to their local area, which is why many high-street agencies have multiple offices across one city or have multiple offices in various cities with some overlap occurring between the different branches.

By contrast, web-based letting options, such as Mashroom, can offer their services nationwide, serving all towns, cities and neighbourhoods. Thanks to technology and digital infrastructure developments, many online-based agents are not tied to one small geographic location.

This provides a significant advantage and element of convenience to landlords who require a reliable and universal service across a large city or several towns. Listing various properties in different cities through the same agent simplifies the letting process and avoids employing multiple letting agents.

Famous letting agencies in the UK

The UK rental market has many well-known high-street letting agencies that offer new landlords a safe and reputable service for listing their properties.

Letting agents that have been around for a long time and are well-known often have a firm understanding of the local rental property market. Some of the largest and most well-known estate agents include Foxtons, which is listed on the London Stock Exchange with over 65 offices nationally.

Savills is another renowned agency that was established in the 19th century. It provides consultancy services and advice for residential homes and has also extended its operations to agricultural properties, property-related financial services, and investment management. Savills has over 600 offices and has expanded its reach globally, with locations in over 70 countries.

Other reputable and famous letting agencies include Knight Frank, Connells and Countrywide. These all perform similar roles and offer comparable services. However, some choose to specialise in more specific aspects of the rental industry or offer alternative and more inclusive services that cater to various property management needs.

More recently, the emergence and rapid growth in popularity of reputable and established online estate agents, such as Mashroom, have posed competition to existing traditional high-street estate agents. Such end-to-end property letting platforms combine technology with an online community network to deliver a better, more efficient way to let, secure and maintain property management services.

How to pick the best letting agents

The continued growth of the UK’s property rental market has also seen the parallel development of letting agents across the country. This leaves landlords with many options yet little guidance on which letting agent works best for them and their property.

When picking a letting agent, it is vital to consider several factors that come together to maximise the likelihood of your property being rented out.

• Consider the estate agent’s location (unless they are an online service) so that you can be sure that the agent has a goodunderstanding of your property’s locality and can market it appropriately and effectively.
• You should also pick a letting agent who matches your management needs and the degree of service you require to market your property correctly and to the right audience.
• One thing to be wary of is letting agents that promise a good service in exchange for below-market fees. Often, such agents carry out unorthodox practices allowing them to advertise lower prices. However, these shortcuts may cost landlords dearly and can lead to fines, legal costs, or further inconveniences.

How do letting agents find tenants?

Finding tenant leads is a letting agent’s ultimate task. The growing number of properties listed on the rental market and a tenants’ extensive choice makes attracting the right renter more complicated and challenging. As such, letting agents have come to employ various marketing and research techniques to find potential tenants for their landlords.

The primary listing locations – Rightmove and Zoopla – attract hundreds of thousands of prospective tenants in search of their ideal property. Letting agents put together a neat parcel of information containing descriptions, photos, and other documentation such as the property’s floor plans. The aim is to captivate prospective tenants yet not overload them with information.

Modern techniques for marketing properties and finding tenants, including posting the properties on social media, mean that the property is advertised to a larger audience. Furthermore, letting agents also canvass the property and use more traditional methods such as putting up ‘to let’ boards and signs, which are also an effective way of attracting interest.

When are high street letting agents open?

As a general rule of thumb, high street letting agents are open during the regular Monday to Friday, 9 to 5, working hours. Many will also be available for a few hours on Saturdays. You may find that some letting agents operate during non-standard hours, so it’s always best to double-check with the agency in question.

When are online letting agents open?

Online letting platforms are operational 24/7, allowing landlords to upload property details outside of the usual 9 to 5 window and, therefore, when it’s most convenient for them.

In light of the coronavirus pandemic, letting agents’ office space have been temporarily closed. Traditional letting agents have been quick to adapt and transfer the vast majority of their operations to digital and online platforms to maintain a consistent, although decreased clientele.

Several letting agents’ websites have help chats that offer a reduced service during non-operative hours for landlords that may need immediate assistance.

Letting agents and renewing tenancies

If you choose to use a high street letting agent, they will likely charge you a renewal fee once an existing tenancy contract ends and the tenants want to keep renting out the property. This process mainly involves the tenant signing the new tenancy agreement, which is almost always identical to the previous one, excluding minor details such as the tenancy dates.

Despite the minimal nature of the task, letting agents choose to capitalise on this with an extravagant charge.

Initially, this fee was charged to and paid for by tenants, but as of June 2019, a newly introduced legislation meant that agencies could not charge tenants with a retention fee anymore, so it has since been applied to landlords.

Online letting agents use many of the same tactics as high street agents. The main difference is that online letting agents can save costs through streamlined communication systems enabling them to provide landlords with better deals in a shorter time frame.

Online letting agents also make the most out of the vast array of technological resources and artificial intelligence to increase the potential of finding new tenants for landlords.

One of the significant advantages of online letting agents is that they are not geographically bound to one location or area. The fact that the vast majority of their work occurs through a monitor makes it ever more accessible on all ends of the transaction – for agents, landlords and prospective tenants.

How do online letting agents work?

There are few differences between traditional letting agents’ practices and the new wave of online letting agents. The marketing techniques implemented are much the same: online agents receive the property’s relevant information and process it through applying their marketing knowledge and experience. Following the review, the agency suggests amendments to help best present the home and attract the highest number of tenant enquiries.

When the advertisement is finalised, the online letting agency post the ad on the major property letting platforms such as Zoopla, Rightmove and Mashroom, and other social media platforms. Once publicised, the advert will be visible to thousands of interested tenants.

At this stage, the online letting agent will filter through and relay all relevant interest in the property back to the landlord, who is in charge of choosing the most suitable applicant.

Lastly, as with high-street letting agents, once a landlord is happy with the prospective tenant, the online agents run through a number of comprehensive reference checks to assess the applicant’s ability to financially sustain the tenancy. Following the reviews, the landlord decides whether to go ahead with the tenancy.

Why online letting agents are better than high street agents

Technological advancements have had a particularly good impact on the letting industry. These have simplified some processes and allowed online letting agents to offer landlords a combination of high service standards with notably cheaper rates, more efficient processing of data and information, as well as more convenient and favourable customer service.

Online letting agents offer greater flexibility, and an overview of the overall tenant find and letting processes. The internet’s permanent accessibility and a high degree of customisability within the digital letting platforms make it a more user-friendly experience and, therefore, more accessible to landlords.

While most high street letting agents state that their local knowledge is a key strength needed for a successful tenancy, much of the insider knowledge they offer can be found through a quick search on the internet.

Of course, they may have some greater knowledge, especially concerning minor details of specific areas – it is then up to you to decide whether this knowledge is worth the additional costs.

How much you can save with online letting agents?

Online letting agents provide most of the same services as traditional letting agents but use a slightly different approach.

One of the main differences between the two is that online letting agents charge lower fees than high-street agents. It is estimated that, on average, opting for online letting agents will save landlords around £1900, and depending on the property size and type, this figure could be even greater.

A high-street agent’s typical fee varies between 7% and 20% of the rental
income.

Mashroom vs High Street Letting Agents

With online letting agents like Mashroom, landlords can avoid such commission-based charges by only paying for the basic services such as photography of the property, reference checks, obtention of necessary certificates (EPC, gas safety, etc.) and other requisites. The subsequently added costs imposed by traditional letting agents are not present with the vast majority of online letting agents.

With Mashroom, it is entirely free.

To learn more about Mashroom and how it can save you time and money, book a free 10 minute call with a member of our team.

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