As the number of Renters continues to rise, it’s obvious that the property market needs to adapt in order to cater to the needs of a generation that has no choice but to rent.
Renting has been the European norm for a while now and it’s become the only option for many UK residents due to a lack of affordable properties. Unlike other European countries, the UK doesn’t have the high level of infrastructure needed to fully support new Renters. In fact, the latest figures suggest that one in five Renters have seen their rent rise in January 2018 alone*. This is also having a considerable impact on the ability of employers in the capital to attract talent. According to City A.M, Accenture, Deloitte and PWC were receiving record applications for jobs in regional cities, with graduates citing ‘lifestyle considerations’ as a reason for living outside of London.
The UK rental market has only just started to address the inevitable problems that arise from a generational shift from buying to renting. Any Google rental property search will immediately direct you to Zoopla and Rightmove and this duopoly dominates the market for Renters, Buyers, Landlords and Agents.
While Rightmove and Zoopla somewhat cater for Renters, the fact that they have become a duopoly also means that Agents and Landlords are facing the rising costs of annual subscriptions. OnTheMarket, which was launched by a group of Agents as a challenge to the duopoly, is a good example of how those navigating the market want more affordable choices.
Canopy is one such choice available to forward looking Agents, Build-2-Rent Operators, Renters and Landlords. Canopy’s RentPassport enables instant Renter screening (free for Renters), including the ability for Renters to track their rental payments and rent a property, either deposit free (backed by HISCOX) or cash deposit, all via Canopy app. The response from the rental market has been incredibly positive with some of the largest Agents and Build-2-Rent operators in the UK already joining Canopy’s trust-based rental community.
The way it works is simple - a Renter downloads the app and is given a TrustScore. From there, they build their RentPassport; an overview of their rental history, including past referencing and rental payments. It’s an easy and efficient way for Landlords to screen a potential Renter, and allows Agents to process new Renters without any additional fees or checks. There is also the option to choose a simple DepositFree insurance policy versus cash deposit traditionally required to rent, which covers both Renter and Landlord for exactly the same amount as would have been covered by cash in the past. Having worked very closely with our Agents, they've remarked at how void periods have fallen, with some properties becoming more affordable by thousands of pounds.
According to recent reports, Rightmove is now following in Canopy footsteps and launching its version of free TenantPassport which it will monetise by offering insurance-based solutions to Renters. While this is a fantastic development, it’s important to note that if Rightmove uses this opportunity to make itself even more indispensable to Agents, additional costs will be passed on to Agents, Landlords and Renters alike, benefitting only Rightmove.
Canopy is focused on collaboratively building the right solution for end consumers and would welcome incumbents (e.g. Rightmove, Zoopla, Keysafe, Homelet) to join our Working Group, given their domain expertise, and help build solutions which will generate value to all the players in the rental community - Agents, Renters and Landlords.
The relationship between Landlords and Renters, as well as Agents, can be greatly streamlined through the use of proptech. Renters are not always able to raise the extortionate amounts required for deposits and Agents do not enjoy going through the costly and tedious paperwork required to establish a tenancy. Landlords simply want to find Renters they can trust, safe in the knowledge that their property and assets are not at risk.
With our RentPassport and TrustScore, all parties have access to a secure, easy-to-use service and, most importantly, options outside of the outdated services on offer. The aim is to not only arm Renters with a means of making more properties affordable, but also to empower them by helping them build credit scores and to expedite home ownership, if that’s their goal.
Renting is an ever-growing part of UK life and an infrastructure needs to be established in order to support all of the parties involved. It is therefore more important than ever for disruptors to emerge and revolutionise the archaic systems we currently navigate within the market.
* According to statistics released by ARLA