What does the future of the property management sector look like?

Posted on 27/09/2017

SDL Property Partners has been developed as a new approach to managing properties, combining a personal touch with back office and compliance support. Our managing director explains the opportunities in leasehold management which led to the launch of our partners programme scheme:

“The latest figures from the Department for Communities and Local Government (2015/16) show there are an estimated 4.2 million leasehold properties in England. This includes 2.9 million leasehold flats. In addition, the government estimate that between £2.5 and £3.5 billion is paid each year in service charges. And each year, more properties come into the market; of just over 160,000 new build dwellings built in 2017, a quarter of these are flats which will usually require professional management.

“Managing agents can broadly be split into two camps. On the one side, there is the large scale corporate approach, with centralised services, slick approach to compliance issues and greater use of technology, yet often lacking that ‘personal touch’. Counterbalancing this are the much smaller scale property managers; the ‘people on the ground’. They know everything about the area and the building, they know the residents by name, but often fall short when it comes to both internal and customer facing systems, as well as up-to-date compliance knowledge. With currently 83 individual statutory compliance issues around tenant administration, health and safety, and company law, etc, that’s a lot for a smaller business to keep up with.

“We believe that the future of the sector rests in the middle ground between these two vastly different approaches. We have launched SDL Property Partners, a partners programme for property management, as a ‘best of both worlds’ approach. It is ideally suited to property managers who want to work for themselves, smaller property management companies who want to scale up, and letting agents who want to diversify into property management. The scheme provides corporate backing in the form of technology, business support and compliance to smaller firms and sole practitioners, who can focus on managing the properties and providing a personal service.

“It’s no secret that many estate and letting agents are planning to broaden their existing service offerings and investigate other potential revenue streams. The fact is that many letting agents already have to deal with property management issues on a daily basis. If the tenant already sees them as a ‘one-stop-shop’ for all their property needs, then why not harness this and turn it into a business venture, creating an actual single point of customer contact? The first call we received from our initial teaser campaign was from an existing letting agent interested in setting up a leasehold management company to complement their existing business, so the appetite is most definitely there.

“It is our belief that a greater emphasis on both compliance and customer service should help to drive up standards across the industry. However, we do believe there are further issues to tackle. There is no getting away from the fact that estate and block management sometimes gets bad press and we see this as mainly due to the issue of regulation. Ultimately, there is nothing to stop any individual setting up their own property management company tomorrow. Eventually, these individuals will usually fall foul of compliance issues but often the damage is done by that stage. We believe that the solution to ridding the industry of the cowboys is to look at the introduction of statutory regulation to bring the industry under legal control rather than allowing it to remain self-governed.

“Whilst statutory regulation may be a long way off, we certainly see the immediate future being about harnessing the best of the current approaches to long leasehold block management and producing a service offering that does not just tick boxes but that truly blows the socks off leaseholders”.

Find out about our approach to SDL Property Partners or contact the team to learn more.