According to figures from Department for Communities and Local Government (2014/15), there are four million leasehold properties in private ownership in the UK, all of which are in need of professional management.
Nick Faulkner, Managing Director of SDL Property Partners, explains why he believes letting agents are in prime position to take a big slice of this property management pie.
A greater emphasis on compliance and service should drive up standards across the industry.
When it comes to the delivery of estate and block management in the UK, you can broadly split the sector into two camps. On the one side, you have the large scale corporate approach, with its centralised services, slick approach to compliance issues and greater use of technology, yet often lacking that ‘personal touch’.
Counterbalancing this are the much smaller scale property managers; the ‘men on the ground’.
They know everything about the area and the building, they know the residents by name, but they often fall short when it comes to both internal and customer facing systems, as well as up-to-date compliance knowledge.
It really is no wonder when you consider the fact that there are 83 individual statutory compliance issues around the likes of tenant administration, health and safety, and company law. That’s an awful lot for smaller businesses and ‘one man bands’ to keep up with.
A LUCRATIVE VOID
I’m of the belief that the future of the sector rests in the middle ground between these two vastly different approaches, and I would argue that letting agents are well placed to fill this potentially lucrative void.
It’s no secret that many estate and letting agents are planning to broaden their existing service offerings and investigate other potential revenue streams. The fact is that many letting agents already have to deal with property management issues on a daily basis. If the tenant already sees them as a ‘one-stop-shop’ for all their property needs, then why not harness this and turn it into a business venture, creating an actual single point of customer contact?
AN APPETITE FOR GROWTH
We are not just talking the talk with this one either. We are such firm believers that the ‘best of both worlds’ approach is the key to the future growth of the sector that we are about to launch our own estate and block management franchise proposition called SDL Property Partners, offering corporate backing in the form of technology, business support and compliance to smaller firms and sole practitioners.
Before officially going to market, we launched a teaser campaign called ‘Ask Nick’, which has seen us target 1,600 property professionals. Interestingly, the very first call we received was from an existing letting agent interested in setting up a property management franchise to complement their existing business, so the appetite is most definitely there.
DRIVING UP STANDARDS
It is our belief that a greater emphasis on both compliance and customer service should help to drive up standards across the industry. However, I do believe there are further issues to tackle.
There is no getting away from the fact that estate and block management sometimes gets bad press and I believe this is mainly due to the issue of regulation. Ultimately, there is nothing to stop any individual setting up their own property management company tomorrow. Eventually, these individuals will usually fall foul of compliance issues but often the damage is done by that stage. Personally, I believe that the solution to ridding the industry of the cowboys is to look at the introduction of statutory regulation to bring the industry under legal control rather than allowing it to remain self-governed.
Whilst statutory regulation may be a long way off, I certainly see the immediate future being about harnessing the best of the current approaches to long leasehold block management and producing a service offering that does not just tick boxes but that truly blows the socks off tenants.
SDL Property Partners will be at the Negotiator Conference & Expo 2017 (stand 16) which takes place 31st October.