Going house hunting
As a millennial consumer, my biggest expense each month isn’t in beauty, food or travel but actually in my rent. And I’m not the only one. On average, housing is the biggest spend category for millennials, representing 30% to 35% of their total spending. Yet, renting my flat has been my worst consumer experience so far. Let’s analyse the home renting customer experience…
First, you need to find a place you would like to live in for more than just a few weeks. Most of the time, you will start to scroll aggregators such as RightMove, Zoopla, etc., hoping to find your happy place. But how to find your own gem among that amount of information?
Location and price are the main filters available on these platforms but how do you know if the property will have the right amount of light? Or if it is close to a nice pub? Last, are you sure it is in the best interest of this aggregator to find you the perfect flat in one shot? Based on Trustpilot reviews, we can observe a lack of trust between these platforms and their audience (on Trustpilot, Right move is rated 2* out of 5* and Zoopla 1* out of 5*). Once you’ve found a few properties that could fit your needs, you have to schedule viewings which means a lot of back and forth via emails and calls to finally arrive in flat with 5 other potential tenants, all fighting for that lovely 2 bedrooms which is actually a refurbished cellar… A solution could be to use rental agents to help you in that process. However, if their fees are certain, one can’t guarantee how much they will be available to help you (on TrustPilot Savills agency is rated 1* out of 5*, Winkworth 3* out of 5* and Knight Frank 1* out of 5*).
If you manage to finally find the property of your dreams, you then need to “apply” to it by submitting a lot of information about you (such as personal questionnaire, credit checks, references…) and by providing a potential financial deposit. A lot of this admin hassle is still non digitised and time consuming for the potential future tenants. And if by any chance the tenant profile isn’t “classic” (ie doesn’t have a full time 9to5 job, doesn’t have a guarantor in the same country, etc.), then this application process can become almost impossible. Once the offer has been approved by the agency or landlord, the tenant still has to organise his move-in and to set up all his utilities contracts, dealing with companies well-known for their poor customer service (US internet service and cable/satellite TV have the worst average NPS by industry at respectively -7 and -6, based on NICE Satmetrix research).
As a consumer investor, such broken customer journey is actually super attractive as it represents a massive opportunity for new players to reinvent the renting experience! At Felix, we’ve seen some players emerging in the space, offering seamless digital experience with limited admin hassle. For instance, the search could be done using more renter-friendly filters, viewings could be partly done via online video, deposits and contracts could be completely managed online, utilities contracts could be bundled with a 5* customer support service…
Given that London tenants spend on average 20 months in a property, this constitutes a unique amount of time for a brand to build affinity with its audience, something that we love at Felix. If you are building such a brand, I would love to know more about you! Feel free to email me or connect via LinkedIn
