Earlier this week, we featured in the Raconteur Future of PropTech report in The Times. The report discusses digital transformation, streamlining and how technology can help first-time buyers.
We also discussed why the rental sector is ripe for technological disruption to help tenants, landlords and letting agents benefit from a more effective rental market.
A rental sector imbalance
The current structure of the rental market disadvantages tenants, with high deposit and moving costs. Tenants typically have to raise around £1,000 for an upfront cash deposit, despite security deposits being capped at five or six weeks' rent as part of the tenant fees ban.
This is exacerbated by figures which show that more than 11 million people currently have less than £100 in savings. There are further financial problems for tenants looking to move between rental properties as they are often required to pay a new deposit before receiving their existing one back.
These issues are set against a backdrop of rising rents, with the latest ARLA Propertymark figures showing that 50% of letting agents witnessed rent rises in October, up from 24% in the same month last year.
Rents have been rising steadily since the introduction of the Tenant Fees Act in June as landlords react to higher letting agent fees by passing the costs on to renters.
Meanwhile, the rental sector continues to grow rapidly, now accounting for around a fifth of all households and expected to hit the 25% mark over the next couple of years.
All this means there is an estimated £4.5 billion locked up in security deposits, this is money that renters could be using to improve their quality of life or save towards their future.
Opportunities for tech disruption
All of the above points to one thing - there is a need for low-cost, high-tech financial solutions for 21st century renters, letting agents and landlords.
The growth of the sharing economy has helped to free up people's assets with services like Airbnb and Uber. It's now time for one of tenants' main assets - their deposit - to be freed up too.
Here at Canopy, we're aiming to eliminate the need for cash deposits by 2025 so that tenants, letting agents and landlords can reap the benefits of a fairer and technology-enabled system.
At the centre of our offering is our RentPassport™ which - powered by OpenBanking - allows tenants to build a portable digital rental history.
This, in turn, helps renters to build their credit scores and access affordable financial products.
Our aim is to create an equal rental ecosystem which is affordable and transparent, while prioritising tenant screening and suitability. This winning combination will set the scene for the rental market of the future.
To find out more about how we're helping renters, landlords and letting agents to revolutionise their deposits, digital histories and screening processes, get in touch with us today.