Letting lets go down the auction route – a good thing?

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When an auctioneer brings his gavel down it’s usually accompanied by the word ‘sold’. However, a newly-launched business is turning things on its head. Landlords are now being encouraged to sign up to a new rental auction site, which will see tenants pitched head to head in a bid to secure a rental property. The site aims to deliver landlords ‘the best possible price for their property’, with the auction founder confident that tenants will simply walk away from rents that become too expensive as a result of furious bidding.

The idea that the gavel comes down to the sound of ‘let’ is a notion that has ruffled a few feathers in the lettings industry. Rental auctions may discourage landlords from using an agents’ tenant find service – cutting out the middle man, so to speak. Perhaps agents are worried about losing other potential revenue streams too. Rental auctions might stop an amount of personal contact between a landlord and an agent, reducing the opportunity to upgrade a tenant-find service into a full blown property management one. And who can blame agents for being concerned? However, after a quick straw poll on Twitter, we found that agents were most worried about the calibre of tenant an auction will attract.

The overriding sentiment was that it would be harder to qualify and handpick a tenant via an auction process. Agents were keen to stress that their emphasis was on finding the right tenant for a landlord, rather than merely achieving the highest rent.

Auctions are not the only activity to cross over from property sales to lettings. A recent report in [I]The Guardian [/I]said that ‘open house’ scenarios were becoming commonplace in the lettings sector, with tenants finding themselves in a crowd of rival renters during viewing situations. Tenants contributing to the article felt betrayed and miffed with the apparent competition, choosing to snub agents who deployed such tactics.

The debate here revolves around marketing ethics. Why are open houses and auctions respected and vindicated in the sales market but dismissed and derided in lettings? Are agents who run rental ‘open houses’ willingly pushing up rents? Will ‘to let’ auctions lead to an inflated rental market? It remains to be seen.

Roy Fuller
Sales Director of [URL=”http://www.everything-lettings.co.uk/”]Everything Lettings[/URL]

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