Tuesday 21 August 2012

Why is the number of LVT cases increasing?

I keep getting told that the year on year increase in LVT cases is as a result of increasingly poor management. This is a very narrow view of the reasons which are multiple. Here are just some of the reasons why there are more LVT cases:

  1. There was massive growth in the leasehold sector from 1998 until 2008. Quite simply there are more leasehold owners.
  2. Many of the developments built were complex urban blocks with high running costs. Some of them are poor quality. Many of the purchasers were investors or first time buyers with expectations of good returns or the ability to quickly trade up.
  3. Values have stabilised or reduced in the last few years - asset growth is no longer reliable whilst costs of services have risen significantly.
  4. Management is dealing with a whole raft of regulatory requirements that commenced in the last 10 years and have a further real cost impact.
  5. Buildings of the last property boom are reaching their first round of major works/refurbishments. Many have not made sufficient provision for these costs.
  6. Leaseholders now have access to significantly improved and more detailed resources and advice. Consumers are getting educated.
  7. We are in the middle of a recession. Non-payers are chased hard, there are more disputes as a consequence.
All of these factors make additional LVT cases as much an inevitability as does poor service. Service standards, I believe, have improved beyond recognition in the last 20 years but so too has consumer awareness. This is a good thing and means that change is happening faster than the rogues will be able to keep up. 

We are reaching a tipping point where service possibilities will meet aspirations of most of the service users - choice has increased, agents are all working hard to improve their image and transparency and leasehold customers are dictating terms. Those who haven't recognised this will miss the opportunity.

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