What's the difference between an online letting agent and a traditional high street letting agent?
MakeUrMove supplies software to landlords. As such we’re a PropTech operating as an online letting agent. MakeUrMove was the first national online letting agency to be launched in January 2008 and over the past decade, we’ve helped to establish and develop part of the lettings industry, seeing a number of comparable online letting agents enter the market.
Over the years we’ve worked with over 25,000 landlords, have dealt with over 200,000 tenants and we’re still growing. But we still get asked the question: “what’s the difference between an online letting agent and a high street letting agent?” So we thought we’d take a look.
How many landlords use online letting agents compared with a traditional high street agent?
Currently, not enough landlords are choosing to use online agents. We believe around 50 percent of landlords don’t use any type of agent, preferring to use their own marketing techniques, 10 percent use online agents and the remaining 40 percent use high street agents.
Landlords that use high street agents tend to do this because they’ve always done it or because they prefer to have a local presence. However, most tenant enquiries to both high street and online agents come via the major property portals, including Rightmove, Zoopla and Primelocation. We believe there are around 120,000 rental properties available to let at any one time.
What’s the difference between a high street letting agent, an online letting agent and a hybrid agent?
There is some confusion between how you differentiate between a traditional high street agent and an online agent. This is further confused by the emergence of hybrid agents such as Purplebricks.
The answer to the question is largely about the people employed either directly by a business or through a franchise agreement. Bricks and mortar shops and boots on the ground cost money so increase the costs.
MakeUrMove is a purely online letting agent; we don’t have a high street presence and we don’t employ boots on the ground. Instead, we are a PropTech provider, we integrate with a number of service providers, through APIs, to enable landlords to find tenants faster and manage every element of their lettings and tenancy process through our online dashboard, with minimal involvement from our team. The focus on automation is what enables truly online lettings agents, such as ourselves, to keep the costs lower for landlords and tenants.
How much do tenants, in general, save using an online agent?
There are varied estimates on the average letting fees for tenants. According to ARLA Propertymark, the average letting fees for tenants is £202.
In the Government’s consultation on Banning Letting Fees Paid by Tenants, they asked agents what fees they charge tenants. Based on the responses by agents, the average fee at the start of a tenancy is £238 per tenant. In addition to this, some agents charge a renewal fee (average of £70), an inventory fee (average of £117) and a check out fee (average of £91). Only one percent of the agents that responded to this question stated that they charge no fees to tenants.
“The consultation also asked tenants what fees they are charged by a letting agent. The responses demonstrate the average fee charged at the start of a tenancy is £327.
So, we can assume that on average tenants are charged between £202 and £327 by high street lettings agents.
As an online agent, MakeUrMove charges £96 per tenant for referencing or the landlord can choose to waive this and pay £96 themselves.
For those landlords that don’t use a letting agent they charge tenants an average of £107, however as most landlords can’t easily put their rental properties on the property portals, this can be a risky and potentially more costly option.
Therefore, tenants could save as much as £231 by using an online agent like ourselves.
How much do landlords, in general, save using an online agent?
Whilst it’s not unheard of for landlords to save up to £1,000 per let, we believe the average landlord saves around £300 per let and around £200 per year on a managed let, by choosing an online letting agent over a traditional high street agent. We charge landlords £49 for advertising on the property portals and £75 for advertising and documentation. We are currently working on new products and pricing which we intend to launch in advance of the tenant fees bill being enacted.
Starting to use an online letting agent
To find good tenants faster, and to list your rental properties on all the major property portals, simply list with MakeUrMove today.