Member Article

Report: National Leasehold Survey 2016

Leaseholder research: Sector must improve communication, skills delivery and education to address disheartened leaseholders

Better leaseholder education and improvements to how managing agents communicate with their leaseholders are urgently required if the leasehold sector is to provide a long-term solution to the UK’s housing needs, according to the findings of the first-ever independent national survey of the sector.

With two-thirds (65%) of leaseholders taking part in the survey saying they would welcome more information on their rights, options and obligations, policy makers have been given a clear indication that improvements are needed, but it raises questions over whether it is a public or private sector responsibility to change and provide the much-needed training and support.

The survey has made a number of alarming discoveries – the vast majority (68%) of leaseholders have little or no confidence in the ability of their managing agent to deal with a problem or dispute, with just 6% being ‘very confident’ their agents would act effectively and efficiently to resolve it.

Poor communication between managing agents and leaseholders is a real threat to enjoyment of a leasehold property, according to the survey, a problem exacerbated when the lack of clarity and information creates mistrust

Furthermore, this is leading to leaseholders feeling they have very little opportunity to be involved in the management of the property, and that they want more democratic decision-making with a greater say on how their service charge is spent in particular.

The survey also identified one of the biggest challenges facing the sector is finding leaseholders willing to take-on the role of RMC director, whilst sentiment amongst RMC directors themselves reveals a clear polarisation in viewpoints – split between those who find the role strongly rewarding versus those who find it challenging.

Evidence that training is lacking within the sector continues amongst RMC directors, who say more and better training and education is what they need to help them to upskill, provide relevant support, and fulfil the role.

Over 60% of RMC directors say the role is time consuming, taking up significantly more time than expected, and that a strong and wide skill set beyond legal and company expertise is necessary to effectively carry out their duties.

They feel a greater amount of knowledge is needed to be an effective RMC, and specific training that looks at the role in the round and which equips them not only with the company law expertise, but guidance and support with communication to tackle the day to day challenges of communal living, is urgently required.

The National Leasehold Survey - the UK’s first ever independent national survey of the UK’s leaseholders – set out to identify the levels of satisfaction amongst the UK’s leaseholders and RMC directors. Developed by LEASE, the Government’s arms’ length body for the leasehold property sector, and property law firm Brady Solicitors, it received over 1,200 responses from leaseholders and RMC directors throughout the UK.

MD of Brady Solicitors, Clare Brady, comments: “The challenges of communal living emerge strongly throughout the nationwide survey. This is compounded where leaseholders – by their own admission – lack a clear understanding of their rights and obligations. This lack of leasehold knowledge, including understanding how to replace a poorly performing management company, underpins many of the reported problems. It also represents a vast opportunity for the UK’s leasehold sector, including its policy-makers, to bring about future change – but whose job is it to educate and upskill our leaseholders and managing agents? Is it the public sector, private sector or the conveyancer at the start of the process?”

Amongst the main findings: -

· 57% of leaseholders admit they regret buying a leasehold property.

· Two-thirds of leaseholders don’t feel they get a good service from their managing agent.

· Just 6% are very confident the managing agent could resolve issues.

· 68% of leaseholders have little or no confidence that their managing agent could resolve issues efficiently and effectively.

· 51% of leaseholders see a change in managing agent would improve matters and benefit the block.

· 1 in 5 leaseholders are unaware they could replace a poorly performing managing agent.

· 55% of leaseholders consider changing managing agents would be a difficult process.

· 48% of leaseholders believe a lack of knowledge is a real barrier to changing managing agents.

· 40% of leaseholders strongly disagree that service charge is value for money.

· 62% of leaseholders say the service hasn’t improved in the last two years.

· RMC directors are generally happier with their leasehold properties than ‘ordinary’ leaseholders due to a greater sense of control over the property’s management.

· Two-thirds of RMC directors feel they have a good relationship with fellow directors and leaseholders, but identify a need for a strong, wide skill set beyond legal and company expertise.

· 55% of leaseholders know where to go for information, but 32% definitely do not.

· 52% of leaseholders are confident they know their rights and responsibilities.

“Whilst there are many strong views aired and some difficult stories to read, including leaseholders saying they feel ‘trapped’ in their home and that they believe the ‘system is broken’, the research also uncovered many clear examples of property management at its best,” adds Clare.

“If the survey findings can help us to extract the essence of what makes a successful managing agent, there are three qualities that would feature strongly: regular and open two-way communication; a genuinely transparent approach to service charge expenditure; and a commitment to educating both leaseholders and RMC directors.”

Anthony Essien, Chief Executive of the Leasehold Advisory Service, sees the research as important for the sector: “Research like this is valuable, not least because of the responses from 1244 leaseholders, but in particular including almost 200 RMC directors who are key players straddling both management and homeownership,” he says. “The findings will update the sector, including Government, on current sentiment around leasehold management, to continue to inform the debate around raising standards, and we will look to assist leaseholders and RMC Directors with the educational needs identified in the survey.”

For more information, to discuss the survey findings, or request a copy of the complete report, contact: Colin Hussey, Director of Business Development, Brady Solicitors: Tel: 0115 985 3450, email: colin.hussey@bradysolicitors.com.

Brady Solicitors has a UK-wide client base of property management companies, commercial landlords, surveyors, property developers and residents’ associations.

This was posted in Bdaily's Members' News section by Brady Solicitors .