Across the UK rental sector, operating costs are climbing faster than revenues. For operators managing student housing and build-to-rent portfolios, the math is straightforward: if you cannot grow the top line fast enough, you have to shrink the cost base. That pressure is reshaping how properties are staffed, what technology they run on, and where human effort gets deployed.
VP Singh, co-founder and chief operating officer at VerbaFlo, a London-based proptech platform powering communications and operations for roughly 280,000 rental units across the UK and Europe, sees that cost conversation playing out daily. “Either they have only two choices: cut the cost or increase the revenue faster,” he says. “Increasing revenue faster is the toughest piece.”
Where the Savings Come From
One of the less discussed cost layers in rental operations is the technology stack itself. According to Singh, whatever an operator pays across its various software subscriptions – property management systems, CRMs, communication tools, maintenance platforms – typically runs between 5 and 10 percent of operational cost. The problem is fragmentation: operators often maintain separate logins and subscriptions for ten or more tools that do not communicate well with each other.
Consolidating those tools onto a single platform cuts subscription costs directly, but adding AI to that consolidated system changes the staffing equation. When routine inquiries – availability checks, qualification questions, viewing bookings – are handled automatically, the human hours previously spent toggling between systems drop substantially. Singh puts the split at roughly 80 percent handled by AI, with the remaining 20 percent escalated to staff where human judgment is needed.
That does not mean operators should strip teams to a skeleton. “We never suggest that you should cut all the humans and you would be able to run it with bare shell staffing,” Singh says. “You would still need humans.” The more productive move, in his view, is redeploying staff from answering repetitive calls to higher-value work – closing deals, improving on-site experience, and managing reviews that feed back into the sales cycle.
The Conversion Gap
Beyond cost reduction, most UK rental operators convert between 2 and 5 percent of their inbound inquiries into bookings, according to Singh. Given what operators spend on advertising, organic traffic, university fairs, and portal listings to generate those leads, that conversion rate represents significant waste.
The bottleneck is follow-up. Leads arrive from a dozen different sources – portals, websites, social media, events – and human teams struggle to pursue them consistently. “People do their best work when their time goes to things that need judgment and care. Repetitive tasks take energy away from that, so handing them to AI gives teams more room for the work that matters.” Singh says. When AI handles the qualification and follow-up cadence, the numbers shift. According to VerbaFlo’s internal data, one large operator using automated follow-up sequences has reached a 17 percent conversion rate, a figure Singh calls “unheard of in the industry.”
Many operators are already generating enough demand. They are failing to capture it.
Student Housing and Build-to-Rent Face Different Headwinds
The UK’s two main institutional rental sectors – student housing, with roughly 800,000 beds, and build-to-rent, at around 150,000 apartments – are managed by overlapping sets of operators but face distinct pressures.
Student housing is currently the more stressed of the two. Policy changes restricting dependents and shifting immigration rules have reduced demand from key source markets like China and India. That demand decline has collided with affordability constraints, leaving vacancies across multiple cities. “These two things came together in the student housing,” Singh says. “That’s why there have still been a lot of voids in a lot of buildings across the UK.”
Build-to-rent has been steadier. The Renters’ Rights Act, implemented in May, was expected to create significant disruption. So far, Singh says, the impact has been limited: “There are some issues that we are seeing, but nothing much has happened.”
What Developers Keep Getting Wrong
When developers and capital allocators underwrite new rental schemes, Singh says the most common blind spot is pricing. “You can build whatever, best of the best things in the market at exorbitantly high prices,” he says. “No one is going to buy it because people don’t have the money to pay for it.”
The challenge is structural. Many assets have already been underwritten with high target returns, making it difficult to adjust rents downward even when the market signals that current pricing exceeds what tenants can afford. “You can’t just come and then reduce the rents by 50 or 20 percent,” Singh says. “It just doesn’t work like that.”
For prospective tenants – particularly students and young professionals – this means new supply does not necessarily translate into affordable options. Buildings may open with attractive amenities but at rents that sit above what most of the local market can pay.
A Different AI Disclosure Standard in Europe
One area where European operators are ahead of their US counterparts involves transparency around AI interactions. Under the EU AI Act, any AI agent communicating with a prospect or resident – whether by phone, chat, or another channel – must disclose that it is not a human. No equivalent requirement exists in the US market.
Singh sees the absence of that standard as a trust risk. When someone believes they are speaking with a person and later discovers they were interacting with AI, “it sort of breaks their trust or confidence,” he says.
What Comes Next
Singh expects small operators to not only survive but thrive – provided they develop clear expertise in a specific market niche, with defined playbooks for marketing, sales, and property acquisition. Larger operators carrying significant vacancies face harder choices, particularly where assets were underwritten at returns that leave little room to lower rents. “It is going to be a little bit challenging,” Singh says. “I think it is part of the cycle. It happens every few years.”
About the Expert: VP Singh is co-founder and chief operating officer at VerbaFlo, a London-based proptech platform powering communications and operations for rental properties across the UK and Europe.
This article is based on information provided by the expert source cited above. It is intended for general informational purposes only and does not constitute legal, financial, or real estate advice. Readers should conduct their own research and consult qualified professionals before making any real estate or financial decisions.
