"The quality and liveability of private-rented homes is key, especially among young professionals who want their money to go towards a place that enhances their lives"
- Daryl Tomlinson - Xenia Lettings
According to the Resolution Foundation, rent rises in Britain are forecast to outpace wage growth, exacerbating the financial pressure already gripping renters.
Despite having surged at the fastest pace on record following the pandemic and during the cost-of-living crisis, rents are predicted to increase by an average of 4.2% each year up to 2027.
The figures reported by the Resolution Foundation significantly outstrip the 7.5% growth in average workers’ earnings (an estimated 2.4% a year) predicted by the Office for Budget Responsibility over the same period.
That said, these predictions came before the new Labour government took office. In 2023, the party commissioned a review of the private rented sector and set out recommendations, including the creation of a National Landlords Register to enforce standards, abolishing no-fault evictions, and using “rent stabilisation” measures.
Overall, these recommendations played a central role in Labour’s election manifesto, so we should hope to see action in the coming months, especially around plans to stabilise spiralling rent costs.
With more financial pressure than ever on renters across the UK, it is vital for property management companies to provide true value for money in terms of service and amenities.
High-specification amenities: meeting modern expectations
It’s no secret that high-specification amenities have been atop renters’ wish lists for several years now.
Post-pandemic, we’ve observed a shift in demand for larger rental properties that comfortably accommodate working from home due to changes in lifestyles and remote work practices.
However, the supply of rental properties has not kept pace with this demand. Many factors, including wage stagnation, landlords offloading portfolios, increased interest rates making mortgages more expensive, with costs passed on to renters, and tax changes, have all combined to create a ‘high demand, limited supply’ scenario.
Overall, this is creating a difficult environment for renters.
The quality and liveability of private-rented homes is key, especially among young professionals who want their money to go towards a place that enhances their lives.
Therefore, it is critical to get amenities right—they are a true selling point.
Tenants are far more discerning. They require superior facilities within their property, high-specification communal amenities within the building, and exemplary customer service from their letting and management agents.
For instance, a bright and functional shared coworking area is a must in the student sector and Build-to-Rent developments.
Embracing clever design features like natural light can help improve well-being and productivity, creating bright, airy spaces for residents to do their work. Additionally, offering modern facilities, such as USB or wireless charging points and ultra-fast broadband connections as standard, is essential in attracting and retaining tenants.
Property management companies must integrate high-specification amenities into the broader customer service provision so tenants come to expect the best from the outset.
Enhancing the resident experience
It is imperative to go above and beyond standard services to enhance the resident experience.
When considering how residents interact with the places they choose to call home, property management companies have a real opportunity to break the norm and think creatively.
Most companies now partner with local businesses to offer renters discounts. A more impactful, long-term approach could involve working with community groups to enhance and enrich the local neighbourhood.
Similarly, social events should be part of the resident experience – not a mere marketing ploy to hook people in.
It’s not simply about throwing a Christmas party and a summer gathering; diversify the social calendar with a range of regular events that bring people together and foster a sense of community among residents.
With this in mind, you should include a calendar of resident-led social activities in annual budgets to ensure the resident experience remains an integral part of the offer.
Properly considered efforts like these can transform a property into more than just a place to live, making it a hub of social activity and community engagement.
After all, as rents continue to rise above wage growth, anything you can do that adds a special touch will make tenants feel part of a genuine, thriving community, significantly boost tenant satisfaction, and positively impact retention.
Be disruptive: innovating in a time of change
In a time of huge upheaval for the rental market, there is an opportunity for property management companies to do things differently.
Agents should aspire to stand out, show their identity, and offer something unique that competitors don’t have.
Tenant demand remains incredibly high, but landlord numbers are dropping due to the economic climate. Property management companies must rethink their approach. To attract landlords, act like a landlord.
Ask yourself: what would be important to me if I were a landlord? That could be mitigating arrears, ensuring tenants are trustworthy, or maximising rent at a competitive but fair price.
Property management companies that offer services and packages to protect these interests may generate ancillary income streams while providing added value to landlords.
For example, companies could introduce flexible lease terms to accommodate tenants’ varying needs or implement loyalty incentives for long-term tenants.
Adopting new technologies can also help property management companies make efficiency improvements that reduce operating costs without compromising service quality.
There are many avenues to innovation. The key is to embrace your USP while reviewing how your existing services can be expanded to meet the specific needs of today’s landlords.
Thinking socially: fostering diversity and inclusion
Corporate Social Responsibility (CSR) is crucial for any business. Fostering a workplace culture of support and encouragement can translate into better service for renters.
Where possible, a property management team should be diverse and inclusive. As the face of a building and its landlords, you will be the first port of call for residents from all walks of life.
Engaging in CSR can also include working on projects that benefit the wider community, enhancing the company’s reputation and appeal among socially conscious tenants.
Ethical marketing is essential for customers. Appeal to prospective residents by keeping communication honest. Also, seek customer feedback and use it to improve your service and resident satisfaction.
For employees, introducing modern benefits, such as promoting a tangible work-life balance, including remote working options where possible, and offering professional development opportunities can help build a motivated and empathetic team that feels empowered to provide the best service for residents.
The aim is to think socially: how does my team look, feel, and behave, and how does that impact the residents they look after and the landlords they represent?
Key takeaways
High-quality amenities matter: As renter expectations evolve, offering modern, high-specification amenities will play a powerful role in attracting and retaining tenants, especially in a competitive market. Tenants now demand better facilities within their homes, alongside enhanced building amenities and superior service from letting and management agents.
Innovate and differentiate: Property management companies should stand out by offering unique services and thinking like landlords to protect their interests, generate additional income and secure long-term relationships with landlords. This innovative approach is critical in a market with high tenant supply and low demand.
Build a sense of community: Creating a thriving resident community can enhance resident satisfaction and foster a positive workplace culture. Partner with local businesses and organise social events to enrich the resident experience. A supportive and inclusive work environment is essential for employees, while ethical marketing and honest communication can build lasting trust and loyalty among customers.
In conclusion, the rise in rents versus wage growth will continue to present significant challenges for renters and property management companies.
Property management companies can provide true value for money and ensure renters get the best possible deal by offering high-specification amenities, being disruptive, expanding services, and thinking socially.
These strategies can help attract and retain tenants and landlords while building a sustainable, socially responsible business with a strong reputation.
