Rising house prices and evolving lifestyle choices mean more and more people are finding themselves – willingly or not – relying on the rental market. And as renting becomes more common, a number of companies have cropped up with the aim of disrupting the market.
In the U.K. alone, more than 10 million people – around a sixth of the population – are living in privately-rented accommodation, according to real estate agent Knight Frank. And while renting is not a new phenomenon, Knight Frank estimates that the U.K. rental sector has more than doubled in size over the last 14 years – and is expected to continue to expand.
Perhaps unsurprisingly, not everyone is happy with their renting experience. A survey from personal finance firm Ocean Finance found that half of the U.K.'s private tenants felt "ripped-off" after either their landlord or letting agent failed to carry out repairs, and a third said they were not refunded their tenancy deposit when they moved out.
"There's a fundamental unfairness about the rental system," Hannah Williams, founder and CEO of RentalRaters, told CNBC in a phone interview.
Landlords, she said, can screen tenants through credit and reference checks, but tenants have no way of finding out about the property and the landlord they'll be renting from. Her company, which was launched in May of this year, allows tenants to rate their rentals and landlords.
"As a tenant you don't have much power," Williams argued, adding that it is this uneven playing field she is aiming to disrupt. RentalRaters' success was almost immediate, according to Williams. She chose not to reveal the site's figures for commercial reasons, but said: "The traffic to the site is fantastic and the number of reviews has exceeded expectations."
The threat of moving out "is not much of a threat to rogue landlords," Williams conceded, but she insisted that going public with your problems can be a powerful negotiating tool – as demonstrated in the following tweets.
Cutting out the middle-man
It's not just tenants who are questioning the traditional rental model – with some landlords keen to improve the process. A survey by London start-up MoveBubble revealed that 70 percent of U.K. landlords believed that letting agent fees are unfair considering the amount of work they do, with 90 percent of them declaring that they had been misled by a letting agent.
One way to solve such problems would be to cut out the middle man – something MoveBubble is striving to do.
Company co-founder Logan Hall says the website "negates the need for an estate agency" and aims to "empower renters and ensure good property owners stand out from the crowd".
Although less than a year old, the company has already secured over £1.30 million ($2.24 million) in funding.
The platform provides a two-way referencing process, enabling renters and landlords to build a profile by giving one another references. When prospective tenants and landlords reach a deal on a property, tenants pay MoveBubble a one-off £50 ($80) fee to remove the property from the website.
"Renting will become a commodity," Hall said, as fewer people want to be "tied down to a static asset", and the shift from home-ownership to "rentership" intensifies.
"Generation rent is separate from the issue of lack of housing," he said. "Generation rent stands for freedom."
Start-up RentMoola was created in response the this growing number of renters - notably those who have chosen to rent as a lifestyle choice – according to Ashlee Utterback, the company's director of U.K. and Europe.
Founded in Vancouver 18 months ago, and launched in London earlier this month, the company claims to "revolutionize" the way in which people pay and collect rent, while providing offers for users.
Members have access to "MoolaPerks" which include discounts on Amazon and money off services like Uber, Naked Wines, Lovespace and more.
Although it currently works with real estate investment funds, property managers and "every-day landlords", RentMoola plans to give tenants the options of requesting their landlords to join.
These new players certainly have the potential to disrupt the market, Daniel Parker, lettings director at Savills real estate agent, told CNBC. "Every agent worth their salt will be keeping an eye out," he said.
Some of these companies will work for seasoned, experienced landlords who know how to operate their portolios and are aware of all the regulatory requirements needed when renting, according to Parker. But he warned a "Tinder for landlords and tenants" could be dangerous with an inexperienced landlord.
"It needs to be more than a self-regulating referencing process," concluded Parker, "it's not just about matching, it's about understanding the regulatory framework".
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