We’ve heard the headline, but can you tell us the real story behind Hello Neighbour?
I always knew I wanted to do my own thing and I had this idea that
if I wrote down 100 business ideas, there’d be a gem in there somewhere... One of those ideas came from my experience of renting in London. When my landlord wanted me to replace the entire floor of our rented house because of one stain, I knew something wasn’t right. I tried the letting agent, but they didn’t want to know and I felt powerless. I thought surely there must be somewhere I can go? So that went onto my list of 100 ideas, and I didn’t think any more about it at the time.
I used to rent a house near my brother Mike, Hello Neighbour's co-founder and CTO. One day I went to his house for a BBQ, (or ‘braai’ as we say in South Africa). I was chatting to Mike’s neighbour over a beer and he told me he was looking to rent his house and move to the countryside. I was actually looking to rent and next door to my brother would be ideal. So, he told me his price, but it was out of my budget. However, at the time I was studying an Executive MBA at London Business School and we had to have a case study for our negotiations course – so I thought, why don’t I use negotiating the rent on this house for my case study.
When I started the research, it just blew me away how much high street agents charge landlords. So, I went back to Mike’s neighbour, showed him the fees he would be charged and suggested I pay the net amount he was asking for, minus the fees. That worked for him, so he went away and with difficulty, he figured everything out. As a private landlord with one property, all the information is out there, but it isn’t organised in a simple, coherent way for someone to understand, especially when it’s not their full-time job. But he managed and it was a much better moving process than we’d ever
had before.
Soon after, I got chatting to Mike – now my neighbour (this is where the infamous garden fence chat comes in) – and we started to question why more people couldn't have the sort of renting experience I had? Firstly, there’s no marketplace for landlords and tenants to meet each other that’s independent of high street agents, and secondly, the red tape and legislation is so prohibitive for landlords. So, we thought, why don’t we build this marketplace and use tech and data (Mike’s area of expertise) to sort out the red tape? And off we went.
When did you take the leap and start to build the business?
We were fortunate to get Robert Nichols (former CEO and founder of Portico) on board, who’s now on the Hello Neighbour board. During his tenure at Portico, Rob acquired 14 businesses, so he is enormously experienced. Rob encouraged Mike and I to figure out our way with no preconceived idea of what lettings ‘should be’.
So, we mapped out the user journey in Mike’s kitchen, and looked to solve each pain point along the way using tech and data, then customer service layered on top. Customer support has always been there right from the start – it’s never just been about tech. And then we went deeper and looked at the size of the market – 4.5 million rented homes in the UK, but just 7% are let through online agents. And everything started coming together.
Our north star was to build a ‘marketplace’ for landlords and tenants to do their business completely independent of the high street. Along the way we surveyed a lot of landlords – 76% were with high street agents, but 82% of those landlords were looking to switch. But to ask a landlord to go from the high street to online is a huge leap, so we thought why don’t we use the tech internally and create it as a stepping stone for our landlords? We’ll manage everything, and landlords will save 2/3rds of the price of a high street agent thanks to our operations and tech, and over the course of their let we’ll encourage them to use the software themselves, with an option to stop and we can take over again. So, we de-risk the business, grow our customer base and make people happy. That’s what we’re doing now and have been for the last year.
In the future, we’re building software that landlords can use completely independently. And we want tenants to say I only want to rent through Hello Neighbour, because: their process means I’ll live in a safe home; I know I’ve got a voice if something goes wrong; and I know I’m going to be treated fairly. That's our ambition – to bring the two sides together. We want fairness and transparency for everyone – landlords and tenants.
Have you had to make any hard decisions to stick to your founding values of fairness and transparency?
We actually started with more of a tenant focus than a landlord one, because that was my experience and we want to do better for tenants. But now, we equally focus on doing better for landlords also
– especially those that have experienced an overpriced or poor service from traditional agents – because they deserve better too. In return, we’re conscious about working with and serving fair and responsible landlords. Because there’s a difference between a landlord that has challenges and an unfair one. We understand and make every effort to help landlords that have problems to solve. But we’ve dropped landlords for treating their tenants unfairly, and for trying to rent out an unfit property. Currently, we have 150 landlords coming on board a month, so if we lose 2% or 3% because of our professionalism and standards, that’s something we’re prepared to do. Generally happy tenants stay longer and look after their home, so landlords should always try to act in the interests of their tenants – it’s in everyone’s interest.
What other problems have you encountered along the way and how did you overcome them?
We’ve had challenges at each stage of the business – at the beginning we had to take a pivot to find a fit for purpose business model – it was a decision that took us a while to make, but it was absolutely the right decision. Then getting the first clients on board, getting some traction, then raising a bit of money to build the foundation of the business, find the right people, and manage those growth spurts along the way. I think that’s probably been the most challenging – it was manageable when it was just Mike and me, but managing the challenges that come with a growth spurt when you have a team of 45 people, that’s completely different.
Getting off the ground and getting our first 20-30 landlords was tough – I remember the first 10 landlords by name! At one point, I thought we’re not going to have a business by the end of the year. So, we tried different leads, different angles, and in the end several things just started to work and we went from there.
Luckily our first few Trustpilot reviews were great too. In many ways, if they hadn’t been, we wouldn’t be where we are today. Balancing the trajectory of growth, with the team and quality of service – it’s an ongoing pursuit.
Are you happy with where the business is at now?
I’m incredibly happy with where we are. We’ve got a team of 45 people, we’ve got an excellent operating model in place, and we increased the tech development team from 2 to 12 last year. We’re raising and closing off another round of investment and with the tech coming out and the team adopting the tech – we’ve got all the pieces now. I can see every part of the business is running. I can see all the reports, KPI's and data, and that’s exactly what we need for everyone to be on top of the business.
What’s your vision for the future of Hello Neighbour?
Right now, we’ve got a laser focus on getting the number of properties we let up – our initial target was 150 properties per month which we hit, 300 is the next one, which I’m confident in meeting.
Currently, we cover London and a few areas outside of the city such as Brighton, Guildford, Oxford and Reading. We have expansion plans over the next few years across England and the rest of the UK, and then internationally. But we’re expanding in a very measured, strategic way – with our tech foundation, we can customise it as needed, but we’re not being complacent – we have to think about it properly and not be too sure of ourselves.
As we grow our ecosystem of landlords – it’s almost 4,000 properties a year – our ambition is then how can we be more helpful to landlords and tenants within that ecosystem? For example, for every property we advertise, we get 60 tenant enquiries, so are there helpful services we can offer during the search phase, the moving-in phase, and then living in the property? Is there more we can do to help buy-to-let landlords increase or decrease their portfolio size, keeping it within our landlord group and some of the institutions we talk to? At the moment, we work with Bricklane and we’re in discussions with 6 other institutions. There’s a lot happening.
We’re also collecting so much data which could be incredibly powerful – how do we collect it in a responsible way? How can it be helpful to landlords, tenants and other people in the market? We have 80,000 tenants on our database today and we get 10,000 enquiries a month. And because we own that landlord and tenant journey, we can provide helpful services at the right time in those journeys.
So, for me, the future for Hello Neighbour is to focus on being helpful and delivering excellent customer value and the rest will follow.
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