This industry means business - Property Management 

Regulation is a popular topic in the property management press, with many calling for a clearer regulatory framework. Researchers asked participants if they agreed with the statement that stronger regulation would benefit the property management industry. 80 percent of respondents were in strong agreement that better regulation would be of benefit, with only 10 percent expressing doubts that it would be helpful.

This echoes views from the ARMA conference in early November and indicates a clear sense from within the industry that we need to tighten up and get better at ensuring a level playing field. With over 63 percent of participants managing in excess of 1000 blocks, it may not be a surprise to see so many in favour of regulation.

The researchers also asked property managers how they felt about a licensing scheme, which could require any person holding client monies (such as service charge and ground rent payments) to be licensed by an appropriate body. 84 percent of respondents would support a licensing scheme, with 15 percent against the idea. RICS members felt less need for a licensing scheme due to their existing audit procedures.

There were concerns about the cost of such a scheme and a general preference for the licensing to be managed by one of the existing core bodies, ARMA or RICS.

Whilst 15 percent felt that a new body should be created, it seems unlikely that it could garner quick support without the backing of ARMA and RICS.

Survey participants were then asked to explain what ARMA does best to support their business - and to highlight any areas where they felt ARMA could improve. Not all interviewees were ARMA members, but of the 86 individuals that were able to answer the question, the majority gave a positive report of their membership body, with 72 percent citing technical updates and guidance as being the most valuable ways in which ARMA supports them. Participants also mentioned ARMA’s conference, its newsletter and training courses.

Areas for improvement were less clear-cut, although a significant proportion (37 percent) would like more support for smaller members and new entrants, which are arguably the organisations that can need the most help. A fifth of those surveyed would like to see ARMA get more involved with promotion of the industry and lobbying. This suggests that ARMA members are broadly happy with its role as a service provider and industry expert but less confident in its ability to influence and generate change.

Right to Manage was introduced with The Commonhold and Leasehold Reform Act of 2002 to allow tenants to take over managing their block without having to buy the freehold. The researchers were keen to find out if property managers were seeing an increase in RTM requests, and, whether they saw it as a threat or an opportunity. Only just over half of participants reported an increase in RTM requests, which may indicate that leaseholders have realised that RTMs are not the panacea to all their perceived ills. Comments from those surveyed suggested meanwhile that they expect the number of RTM requests will increase.

With a bullish 72 percent seeing RTMs as an opportunity and only 11 percent as a direct threat, the results indicates that the majority of surveyed property managers believe their service levels ensure they will benefit from a move towards Right to Manage. Property managers clearly need to be ready to act as both poacher and gamekeeper if the volume of Right to Manage requests does increase.

From overwhelming support for regulation and a potential licensing scheme, through to appreciation of ARMA’s guidance work and a desire for more help for new and smaller entrants to the market, the research results indicate a strong call to further professionalise the industry. As one participant eloquently commented: ‘This is an increasingly complex industry that is extremely demanding, requiring properly trained and qualified property managers to show that we mean business and are becoming increasingly professional.’ Here, here.

Clare Brady is the Director of Brady Solicitors.

Survey notes

The researchers spoke to 101 property managers across England and Wales, of whom 16% manage over 5,000 units, 47% manage between 1000 and 5000 units and 37% manage less than 1000 units. The survey was conducted during November

2011 by Mainstream Marketing on behalf of Brady Solicitors and News on the Block.