The UK is home to four million leasehold properties in private ownership, according to government figures. The majority of which require professional management.
With many estate and letting agents already organising repairs and maintenance, sometimes on an informal basis, I believe they are well-placed to add estate management to their range of services.
Anyone familiar with the delivery of estate and block management services can appreciate how diverse the sector has become over the past decade. At one end of the market are independent property managers responsible for just a handful of homes. These small companies and sole traders know the area, their tenants and can be on hand quickly if something goes wrong.
The downside is they often lack robust internal and customer-facing systems, including up-to-date knowledge on the latest legislation and compliance issues. With 83 separate statutory compliance issues, covering everything from health and safety to company law and tenant administration, many simply do not have the resources to stay on top of, and implement, all the changes.
Contrast this with the more corporate approach, where larger companies manage multiple blocks across a much wider area. They may have little day-to-day contact with tenants, but offer a more ‘professional’ service, for example, online booking forms for repairs. Centrally operated, these firms typically have systems in place to ensure compliance criteria are met.
But between these two approaches, there is a middle ground – which I believe letting and estate agents should be poised to swoop in on. In fact, it’s their knowledge of a locality and strong client relationships, underpinned by a professional approach to compliance, which will set them apart from their rivals and enable them to become credible estate management experts.
Many estate and lettings agents are already offering this service on an ad hoc basis, drawing from their list of trusted traders to arrange repairs. When something needs to be fixed, the agent is often a tenant’s first port-of-call, so surely it makes more sense to charge a flat fee and provide reassurances that people can access services quickly and easily? This could also be easily extended to include ongoing maintenance, such as gardening.
Slowly but surely, agents are realising that there are lucrative new opportunities in this area. Traditional firms, who are perhaps feeling the pinch from online-only letting services and dwindling numbers of buy-to-let landlords, can now open up another revenue stream, capitalising on their existing portfolio rather than continuing to add housing stock to their books. It may also give landlords the assurance they need that their properties are in safe hands, since the agent rather than the tenant will carry out more maintenance work.
By working with agents to drive up customer service and compliance levels, the whole property industry benefits from greater professionalism. Over the coming years, I hope that more regulations will be introduced to weed out shoddy property management firms that give others a bad name.
At the moment, anyone can set up a business – and there is nothing to stop them cutting corners and/or failing to comply with the relevant legislation. In some cases, self-governance is not enough to ensure tenants receive a high standard of service.
But until more controls are put in place, if indeed they ever are, letting and estate agents are in the strongest position yet to move into property management, blending together professionalism, compliance and, above all, excellent customer service.
*Nick Faulkner is managing director of SDL Property Partners, which has just launched a new property management service for estate and letting agents.