Some of the changes in the world of residential property management this year will arise because of wider changes in the way the world operates and the current economic climate, but many more because of increasing consumer pressure and Right to Manage. So here is my list of the top ten predictions for this year in the world of residential leasehold management:
- ARMA will commence steps towards a real regulatory regime with genuine power and independence. Watch out for ARMA ‘Q’ announcements. All professional bodies need to be putting some distance between their members and their regulators.
- A noticeable trend towards the separation of residential management from the ownership of freeholds. Developers and Landlords will be thinking carefully about self managing – some are concluding it is better off in house, but most will understand the inherent risk of tainting their brand if they get it wrong.
- The LVT will continue to improve the consistency of its decisions nationwide - but will also continue to be overwhelmed with new cases.
- Right to Manage application loopholes allowing landlords to resist otherwise legitimate RTM claims will rise as landlords and their advisors become more savvy - and scams that allow the creation of RTM Co.s by outside agencies will increase. Even the best meaning legislation soon attracts abusers.
- The IRPM will begin a process of moving towards becoming the intellectual and academic hub for debate surrounding the industry, driven by a rapidly growing and younger membership.
- Further consolidation of the industry as the myriad of smaller, and barely profitable, operators are subsumed by larger players and large companies and investors, particularly in facilities management, will look to widen their property services offering and include residential block management amongst their options.
- More performance related management contracts that follow on from very detailed pre tender and tender processes – more like the public sector. Customer service and compliance will be the key measures. Agents will be required to demonstrate their relevant experience and expertise in order to tender.
- There will be no new legislation, no government sponsored regulation or reviews of existing legislation. There are other pressing matters to deal with at the moment and we remain way down the pecking order.
- Customer understanding of how leasehold management really works will continue to grow exponentially as detailed information and transparency become the norm. ‘Value’ rather than ‘cost’ will become the driver to getting better service. Most customers really do want to protect the value of their property, not simply to cut costs. This is a real opportunity for the industry.
- Transparency. I looked closely in 2011 at a number of agents charging just a simple competitive management fee. Most of them were technically insolvent because management fees alone do not cover the cost of management. Being transparent requires a careful look at what it really costs to manage properties. If the cost is right, agreed from the outset and clearly contracted, then there are no hidden extras.
I am convinced that managing agents remain essential in delivering safe, secure and highly valued places to live and work. But we are not in a popularity contest, those who chose not to pay have to be chased, essential works have to undertaken and difficult decisions have to be made. That always makes for uneasy relationships.
Let the debate begin.
