Read the latest opinion piece from our CEO, Alec Guthrie, who discusses the changing face of block management.
Alec Guthrie is the CEO of the Vegner Group, which owns HML, Faraday Property Management, Dauntons Soar, Shaw & Co Surveyors and over the last few years has successfully acquired more than 50 businesses.
“I’ve worked in the property sector for 35 years and in the block management world for 28 years. I believe that leasehold is not broken but the future of how we service our customers is evolving.
As the CEO of a business that manages in excess of 3,000 developments, with some 100,000 units under management, I fully appreciate the arguments around the shortcomings and failings of leasehold but more to the point the failings of the customer experience from those delivering it.
In a career that extends over 3 decades within the sector I would also argue it is not as broken as it might appear. The pricing model is the root cause to its failings but delivering a message that ‘you get what you pay for’ is hardly an easy sell when the work done by an agent is not currently valued and is misunderstood. This results in unhappiness for the client, the leaseholders and the agent.
However, as Government look to clamp down on leasehold abuse around escalating Ground Rents, they talk about capping some of the fees agents charge, they look to manage the challenges that have been thrown up as a result of the Grenfell tragedy, they flip flop around the benefit of regulating agents and cannot agree on whether there is a need for a Building Safety Manager or not, whilst also exhorting the virtues of Commonhold as being the solution, with neither of these options addressing service delivery.
As a business we employ over 400 people who provide a service predominantly made up of Resident Management Companies, whereby the people that own their own leases are empowered to manage their own buildings. We act as advisors to help them understand the minefield of landlord and tenant, along with understanding Company Law, Health and Safety Law, fire safety, gas safety, asbestos management, powered gate regulations, waste management, recycling, parking legislation, anti-social behaviour, environmental issues, accident recording, mixed tenure, trespass, name your hobby and we need to understand it, as well as be mediators, social workers and if some clients had us believe be the police too.
All said from where I sit I do not believe leasehold needs a great deal of change to make it work.
Today I am a CEO of a large business but less than 10 years ago I managed a small, local and traditional managing agent. As a business we employed twelve staff, managing 3,200 units spread across 200 developments. I knew most buildings and, in many cases, knew the Directors of the Resident Management Companies by name, many I would have said became friends. The commonality between these two different businesses was the focus on Resident Management Companies as opposed to working for Freeholder clients or Developer clients but the goal between the two different businesses is no different – both want to deliver an exceptional customer service to their clients, no one sets out wanting to do a bad job.
In all honesty neither are probably succeeding in achieving excellent customer service.
The large national agent has the machinery, the expertise, the knowledge and most likely the resource, due to investment in technology as a result of scale to be able to deliver an exceptional service but they do not have the ability to operate on a personal and local level.
Meanwhile the small local agent has the local knowledge and the ability to become familiar with the building inside out because it is on their doorstep, they understand the people that live in the building and can tailor their service as a result. However, the negatives are they are handtied to scale up with the investment in technology which is often outside of their financial constraints and probably knowledge. The changing legislation involves having to employ experts that cost and that cannot be scaled due to the size of their business, the demands of change impact their learning journey and so keeping abreast of their areas of expertise is too demanding. Furthermore, the complexities of compliance distract them from doing exactly what makes them different from the national agent and that is getting to know their clients, developing a relationship and having the time to understand the buildings they manage.
Both the national agent and the local agent have a very valid place in the market, but the complexities of that market have become such that the solution to providing that excellent customer experience cannot be met by either service provider. I believe marrying the qualities of big and small or national and local together is what is needed.
That solution exists with B-hive Block Management Partners. It is not a franchise service, it is a partnership – a partnership between national and local. The national brings the technology, the compliance around service charge accounting, the delivery of services concerning Health and Safety, whilst supporting investment in legal departments. B-hive have expertise in many different directions, thus being on tap for the local agent to use and call upon as and when it is needed, thus enabling the local to focus on understanding the fabric of the building and the relationship between the residents, along with being the conduit between the building and the compliance needs provided by the national agent.
Without making it too complex the partnership looks to embrace the best of both parties’ skill sets.
Many companies and individual property managers agree this is another way for customers in the future. We have already signed up 37 partners and we have many in the pipeline. B-hive have partnered with surveying firms, sales and letting agents and experienced property managers who have chosen to set up on their own block management business with the knowledge that they can provide local and excellent customer service, supported by a trusted, capable and credible partner.
I believe the future will see more and more local agents and property managers adding block management to their existing service provision or setting up their own businesses and as a result getting a better quality of life.
There is no doubt that buildings located in a large metropolis like London will always require a highly skilled and experienced operator. The Governments reform only seems to concentrate on these developments, but they need to understand that some of the buildings in other locations like the West country, East Anglian villages, the Cheshire plains and Cumbria are inherently different to London, Birmingham, Manchester and Leeds and need a very different solution without compromising on safety and compliance.
In any event and in any location, with any level of complexity our partners are able to provide the best of both worlds, a first-class customer experience and a current and future proof compliant service.”