Is Residential Block Management in the UK a two tier system?

We often hear residential management in the UK referred to as a cottage industry. Apart from a few large players the industry comprises many thousands of small, usually local, providers and a widely differing range of services and qualities.

The current climate has seen many new entrants as property managers set up on their own and estate agents look to diversify. As I have previously discussed, a lack of barriers to entry is not always likely to promote better quality with, understandably, price reductions being the main selling point for many new entrants.

The consequence of this is an increasingly polarised service dependent greatly on the type, size and value of the estate or property in question. Clearly large complex blocks require sophisticated solutions that are technology led and fully compliant and asset values are greatly affected by a failure to deliver high class services. Small schemes on the other hand, with little or no mechanical and engineering requirements, require far less in terms of sophisticated response, compliance and ‘green’ efficiencies. They do not have site based staff and they do not have complex fire systems. The risks are considerably less.

There is rightly some concern when services provided by large agents are utilised on blocks without the need for an all encompassing approach, the cost of such a service will be considered too high because the ‘boiler-plate’ approach is not economic at this scale. Likewise low value ‘economy’ approaches are unlikely to suit large complex schemes where saving money could lead to safety issues or an overall reduction in asset values.

A compromise is usually best and any agent who is not seeking to provide best value at every level will suffer some losses – but this does not mean being the cheapest. The best quality services will always have customers as will the cheapest. Just make certain they are right for your development over the longer term.

Of course this brings us neatly to the difficulty that managing multi occupied schemes has always had: Not everyone wants the same thing. Some will want to save on costs at almost any level and any outcome. Others will want to spend and spend on maintaining values and creating quality. Clearly the answer lies in the middle and the challenge is to allow as many as possible to believe that they are receiving best value at the right price. This is very different for a suburban estate of starter homes to that of super prime apartments in London. It is also different for long leaseholders as opposed to short term renters and again different for commercial occupiers.

In summary then it seems that there remains plenty of space for a wide range of service levels across a huge number of agents. Just ensure that the important statutory and regulatory requirements are not overlooked for the sake of some short term savings.