Association of Residential Letting Agents Meeting in Scotland - Report, Part 1. Wednesday 29th November 2006: Speaker 1 - Nick Medhurst from Orchard & Shipman PLC

Nick Medhurst gave an informative speech on the future of the letting market during yesterday's ARLA Scotland meeting. Many agencies are not aware of the changing trends in consumer behaviour, and it was hypothesised that if they do not adapt then they may face business losses in the long run - here follows a summary of his speech:

Emphasis was placed on the 'human' element in business, and the overall reduction in innovation that letting is faced with - companies must be willing to take risks and evolve - turning one-time customers into lifetime customers and ambassadors for an agent's service. Satisfaction is no longer a good enough result to achieve this, loyalty is paramount to returning business. The market will also begin to change along with attitudes - factors such as social housing should be explored, as well as the development of sophisticated products to better agent results. Mr Medhurst also pointed out that in general the demand for housing will outstrip supply in the future and warned against the 'demographic time bomb' we all face.

Many agents do not appear to offer a dedicated service to tenants, whether this is because landlords do not want to pay more for such an option, or merely because they are not considered important aspects of the business. It is worth remembering that today's tenant may be tomorrow's landlord - aftercare could be offered by agents to encourage a future return, e.g. seminars, letters, follow up phone calls/emails - also it costs more to gain new business than to maintain existing business.

The online boom in lettings is probably going to continue - with more and more options available to consumers. With the government already implementing online processes for property possession, how long before the entire rental process can be carried out over the web? Customers cannot see into the future, it is the responsibility of agents to create better options and lead them forwards. There is also likely to be a rise in the number of people who will judge on ethical issues - organisations that initiate ethical investment will reinforce brand loyalty. A move from the transaction sales based culture to one where active participation in customer life is encouraged will benefit those who are willing to think creatively.

After the main body of the speech there was a Q&A session where Mr Medhurst explained Orchard and Shipman's involvement in social housing. They applied for tender from Edinburgh City Council and won, and now have 800+ properties on their books into which vulnerable families and individuals are homed rather than the expensive bed and breakfast style options. Landlords who choose this option can get guaranteed returns and a stable long term rental. They offer an intensive management service, with expert advisors, to ensure rental arrears and other problems are kept to a minimum. Edinburgh City Council pay a fee for each property in the scheme, although Orchard & Shipman are responsible for paying landlords in the event that a tenant fails to keep to their rental agreement. Properties in this scheme are well spaced to avoid 'ghetto' type developments and to integrate families into neighbourhoods without discrimination. Overall, the cost to the taxpayer is less than with methods traditionally used by councils, and a better future is available to people who join the scheme.