Renting a London Flat

Advertising to rent a London flat over the last 30 years was covered in our last blog, today I will summarise the current situation, which for property rental is currently in a great state of flux. The whole rental market is divided into landlords renting directly to tenants, and landlords renting through agents who collect the rent, and charge a monthly commission of 10 – 17% before paying the rent to the landlord. Letting Agents attract landlords because in addition to their own marketing advertising they are able to feed their flats automatically into property portals, which are the websites which tend to feature at the top of all Search Engine searches due to their budgets and expertise at manipulating the searches. There is a lot of argument and movement about which of the portals tenants will search, but roughly speaking the pecking order is:

1 RIGHTMOVE.CO.UK

2 The Digital Property Group

3 Propertyfinder Network

4 Nestoria

5 GLOBRIX.COM

6 Trovit UK Homes

7 ZOOPLA.CO.UK

8 Fish4homes

9 Mouseprice.com

10 HOMESONVIEW.CO.UK

Source:http://www1.propertyportalwatch.com/2009/08/globrix-com-hits-uk-top-4/

If a landlord wishes to rent directly to the tenant the only one of those portals that will accept a direct listing is Fish4Homes who charge £20, so until recently that left the private landlord with a limited choice when it came to listing their property. From my own experiences of advertising over the last couple of years I would report reports from the channels as follows:

• Word of mouth. Absolutely fantastic, we get returning tenants, recommendations, and people who failed to get a flat from us waiting for the next vacancy. By far and away the best way to fill vacancies, without doubt the best way to get tenants is to be a fantastic landlord!
  • 100% conversion rate
  • zero cost
  • no effort

• Free Agents. The central London lettings market has an excess of demand over supply, so some tenants jump the queue by letting through an agent who charges the tenant for an introduction to the Landlord. In most circumstances this is illegal, nevertheless there are reputable agencies who operate within the law – Central Flats, Flatland, and Interlet. These agencies will advertise on the Property Portals for the Landlord and then charge the tenant for their introduction to the landlord (typically around £150), but unfortunately they tend to operate at the lower end of the market and only Interlet have any success beyond bedsits. In addition to the 3 named agencies there are a number of bottom dwellers who shall remain nameless, but who feature in our series on Scams. If you want to know who they are – search Gumtree!
  • Zero cost.
  • a lot of effort as they aren’t the easiest people to deal with.
  • a bit hit and miss as you never know if they are going to feature your property or someone else’s.
  • Even the reputable companies named have a dreadful reputation with the tenant community.
  • No timewasters, they’ve paid, because they really want somewhere to live.
  • Poor quality tenants, they’ve paid because there is a reason why they find it difficult to be accepted by landlords.

• Local Advertising. In Pimlico we have the disadvantage that Westminster City Council has banned Agency Boards, nevertheless they will turn a blind eye to posters displayed in a window (free). We have also placed advertising in newsagents (especially the one opposite a large Estate Agent!) (£1/week), and have a large 2m x 1m banner (the planning permission limit) on scaffolding when we have work being done (£50). We’ve had half a dozen enquiries all of which were either after something completely different (but couldn’t know until they had phoned) or timewasters.
  • Surprisingly expensive
  • A lot of effort
  • No benefit

• Loot. Their online interface is utterly hopeless, of many disasters the biggest single one is that cut and paste doesn’t work, trust me – don’t waste your time. Telephoned ads can be placed, but I can’t tell you how much I have spent without it plunging me into a foul mood. Lets just leave it that I have spent more on Loot than on all other advertising put together in the last decade (that includes my disaster with Adwords) – and got fewer enquiries than the local advertising.
  • Expensive
  • Useless

• Website. I’ll be Blogging about how you can get a website and blog just like mine some time in the future, but I would say that it’s an act of faith rather than a commercial investment with a return. I would say that to reproduce what I have would cost £1000 and take 3 years to achieve the necessary trust and authority from search engines. It is of limited use for direct enquiries from search engines, but invaluable as a destination for online advertising.
  • Cheap
  • A lot of effort
  • Establishes credibility
  • Only of use in conjunction with Internet Advertising

• Adwords. When I set up my website I had a very clear plan – when I didn’t have vacancies I was going to run Adsense advertisements (look at the panel on your right, and click on anything that interests you, this will earn me a tiny sum from the advertiser). On the occasions that I had vacancies I would replace the Adsense with my own advertisements and run Adwords campaigns to attract traffic. I’ll give you some figures and let you work out whether this is a good idea – I currently make around £0.25p/day from Adsense (of which 10% comes from this blog and 90% from the website, it used to be £0.35p before the credit crunch & the decline of £/$). I spent £460 on Adwords and the Microsoft equivalent, but didn’t get any enquiries. An adwords consultant would say that the problem was my inexperience in setting up campaigns, and that if I had employed an expert to run the campaigns for me I would have got results.
  • Expensive
  • Nearly as effective as Loot

• Internet Advertising. Internet Advertising is the biggest single way that we let our flats, we probably let 80+% through this route. It is so important that I will devote tomorrow’s blog to how we are currently advertising on the internet.

London Flat to Rent?

Where should you advertise?

I’ll tell you that tomorrow!

If you are Landlord you need to think hard about how you advertise. If you are a tenant you need to read my blogs on how to get the best flats at the lowest prices.

I was reading the Gumtree Board when I came across this cry for help:

“I’ve been very happily recruiting lodgers from Gumtree’s short term section for nearly 4 years now, it’s worked really well for me and I’ve had lots of interesting and well-behaved tenants. But I’ve been advertising for 3 weeks now – not one response and only 28 views of my ad? Have the scammers driven the genuine flatseekers away?”

This rang a bell with me as we stopped using Gumtree a year ago after a series of abortive listings with no serious enquiries, and atrocious customer service over paid for listings which weren’t run. There is a market in London for advertising from private landlords who don’t want to incur a letting agent’s fees, and it is interesting and informative to review the changes to this market over the last few decades.

London Evening Standard

If you go back further than I can remember (and that’s quite a long way!) the only place to advertise a flat in London was in The London Evening Standard, which in those days was one of 2 evening papers published daily, and carried extensive Classifieds. Nobody looking to rent a London Flat looked anywhere else, and no Landlord advertised anywhere else.

Loot

The market was turned on it’s head in 1985 by Loot’s founder, David Landau, with the launch of a revolutionary new paper called “Loot” – a means ‘to buy, sell or exchange absolutely anything’ – and it turned the Classifieds industry on it’s head. It was  published every Thursday containing only 16 pages of ads, but uniquely instead of charging the advertiser it charged £1 for the paper. Although that was an extraordinarily high charge for a list of  classified ads people flocked to buy the paper as the free to list business model ensured that it would contain wonderful bargains. It became an outstanding success, and took over as the medium for London’s Landlords and Tenants. Nearly twenty years on I can remember my very first listing in Loot – it was viewed and let at 07:30 on the Thursday morning and the rest of my day was spent explaining to callers that the flat had been let.  At one point, Loot’s free-ads publication was published in 20 editions per week across the UK with a weekly circulation of approximately 180,000 copies and it held a monopoly in the field of private flat renting.

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Scoot buys Loot

The decline of Loot started in 2000 when it left private ownership and was sold to Scoot for £200M before passing into the hands of the owners of the Daily Mail. The simple problem was that having paid so much money the new owners needed to get a much higher return from the business than it’s private owners had been happy with. When Loot started charging Landlords for their advertisements, they moved on and soon the tenants stopped looking. I can confirm from 2 expensive advertising campaigns in Loot that it is no longer somewhere for landlords to consider advertising.

Gumtree

Gumtree

Gumtree was a struggling free Classifieds Website founded in 2000 by former bankers Michael Pennington and Simon Crookall, however when Loot’s need for higher margins result in commercial suicide, the website was able to step into the breach. During the period 2002 – 2007 Gumtree replaced Loot as the dominant location for flathunters, and for those 5 years Pimlico Flats didn’t advertise anywhere else. However in a story reminiscent of the Loot story, in 2005 eBay purchased Gumtree, policies changed to try to extract a return from the investment, and within 2 years the site was in the sharp decline reflected so aptly on their community discussion board. Just has Loot managed to destroy it’s own business by pricing out the bargains that brought paying viewers to it’s doorstep, Gumtree has become victim to a similar suicide. It has become a haven for scams of many different kinds (click on the Scam Tag in our Tag Cloud)  whilst simultaneously raising it’s charges to advertisers, and in consequence it’s listings have lost value to viewers.

London Flat to Rent?

Where should you advertise?

I’ll tell you that tomorrow!