A new partnership has been launched, designed to take some of the risk out of the London lettings market for agents.
The new product, LonRes Let Alliance, has been specifically designed to address some of the problems in the market – for example, sub-letting and ID fraud.
LonRes managing director Anthony Payne said: “What we have been seeing for several years now is professional gangs at work, targeting high-value properties.
“They rent them and then sub-let them, making huge profits, but paying no rent themselves. It is a massive problem for agents in London.
“Unfortunately, you are not allowed to create a list of bad tenants. However, Let Alliance has been referencing for long enough, and knows which tenants have been, shall we say, found wanting.”
Andy Halstead, founder of Let Alliance, said: “I have always thought there are two rental markets in the country – the London one, and elsewhere.
“The London market is unique simply because of the huge amounts of money. The Manchester market has its own issues, but there the monthly rent for an expensive apartment would be what you would pay per week in London.
“We have developed referencing products specifically for the London market, with in-depth investigation.”
The partnership between LonRes and Let Alliance is now live, meaning that referencing, insurances, replacement deposit products and other services will now be available to all LonRes’s 1,500 agency office members. Referral fees are on offer.
Payne said that the London property market as a whole is “bumping along the bottom”.
He said that it had been difficult since 2014, but that vendors had taken a long time to accept price cuts.
He said: “My feeling is that we are now at the bottom of the market, or thereabouts. Will there be a little bit more pain? Perhaps.”
A major concern, clearly, is the tenant fees ban. Halstead says that for some firms, this will remove 20% to 25% of revenue.
He said that there was “no silver bullet – if there was, we would have found it”.
He said: “The only way forward is for agents to re-engineer their businesses. Tenants are consumers and they want their agent to be able to offer them choices, whether it’s insurance or a replacement product for a deposit.
“We have had our product, Nil Deposit, up and running since last September. Where it is offered to tenants, seven out of ten go for it.”
Comments (5)
Hi Woodentop; Nil Deposits through Let Alliance is only ever offered as a choice. When tenants are offered the choice between a 6 week cash deposit or a Let Alliance ‘Nil Deposit’, 70% take up the Nil Deposit option. Tenants must successfully go through our Ultimate Reference process and take up tenants liability insurance. Let Alliance Nil Deposits is only available to professional letting agents and in Central London, to LonRes subscribers only. Feedback from tenants and agents is very positive. The Let Alliance proposition is fully integrated; Referencing, Nil Deposit, Rent Guarantee, Tenants Liability, Tenants Contents, Tenants Income Protection. Choice, ease of access and delivering what tenants want is key to the future in a tenant centric market.
Thanks Andy. So what happens to those that are not offered “Nil Deposit”? Choice, ease of access and delivering what tenants want is key to the future in a tenant centric market. If you won’t provide it and their is a government ban, is an obvious question.
Are we creating a niche of tenants that cannot be housed. Do they become homeless, where if they got the money together at this time, they stand a chance? I foresee that no landlord will accept a tenant unless they provide some form of protection if they should misbehave. What the tenant wants, respectfully should read what the Landlord needs, for it is their liability that requires protecting.
“We have had our product, Nil Deposit, up and running since last September. Where it is offered to tenants, seven out of ten go for it.”
Can you clarify when Nil Deposit is not offered to tenants? (terms)
It’s a good thing that suppliers to agents are coming together to support our businesses. London needs a specialist approach, the market does have specific challenges. Well done!
So now agents in London as well as Manchester will be able to check tenants and buy insurance?