The majority of property managers in the Midlands are increasingly concerned about how the recession will impact on their business in the year ahead, despite some evidence of sustained demand for residential rental property.
According to an industry report by Pi-Property Insurance, 79 per cent of UK property managers said that they are concerned about what the year ahead holds in store, despite the fact that more than half (55 per cent) expect demand for residential rental property to increase in the year ahead.
By contrast, 51 per cent of property managers are expecting demand for commercial property to stay the same or fall in the year ahead.
Don Morrison, managing director at Pi-Property Insurance, said: “Demand for commercial and residential rental property has become increasingly polarised during the downturn and as a result, some property management companies are more exposed to the effects of the current recession than others.”
The report identifies the top challenges facing property management companies in the current economic climate. Attracting viable tenants is the main challenge according to 62 per cent of the respondents, followed by controlling costs (38 per cent) and reducing risk (30 per cent). Other challenges include staying compliant, despite a growing amount of red tape.
Mr Morrison added: “The industry is striving to balance cost and risk, while staying compliant and reducing the administrative burden on their business.
“With these challenges in mind, one in four property managers have already identified that insurance is a growing priority and we expect more property managers to review the insurance cover they provide to landlords in the future.”
The recent introduction of FSA regulation controlling the sale of insurance combined with greater cost sensitivity among landlords, has added to the frustrations.
“Insurance is an increasingly important issue for landlords and property managers alike,” he said.