ARMA and the EWS1 Saga #Sheffield #PropertyBlog

 

Although the horror and tragedy that was the Grenfell tower disaster is now over four years ago, the ghostly remains of its tragic legacy will unfortunately continue to haunt many people throughout the country for the foreseeable future.

The crack down on dangerous and combustible cladding has left many flat owners up and down the country feeling very nervous and worried about the prospect of unaffordable and spiraling repair bills for works that they simply do not have the money for, leaving many with potentially worthless properties.

Although the Government is indeed starting to tackle some of the issues that have been presented by events in 2017, the guidelines remain murky and many people are finding that they are now falling in- between the gaps in the legislation. In a nutshell, buildings higher than 18m / six storeys need a satisfied ESW1 for selling / re-mortgaging purposes.

The biggest cause of concern for us as Estate Agents seems to be the buildings that fall below the threshold. Although not a legal requirement for all residential buildings to have a satisfied EWS1, for buildings below this height, it is now becoming more and more frequent for mortgage companies to request one before agreeing to lend. It seems that there is a lingering sense of nervousness within the industry that nobody wants to have a repeat of the disastrous events that happened in North Kensington on their watch. 

This is an ever-increasing problem and it’s something we have now had first-hand experience at a site we manage at Kelham Island. Fortunately for us (and the owners), we have now received a satisfied EWS1 on all the blocks, with not a single remedial piece of work needed. The sense of relief was palpable from all corners of the development, including in our office too!

This situation will continue to rumble on and on for the foreseeable future and I am sure there will be many twists and turns in this long, drawn out saga that are yet to come. However, it is encouraging to see the Government starting to sit up and realise that there is a problem with fire safety within high-rise buildings in the UK.

The problem remains however, in that too many leaseholders are now feeling abandoned by the lack of clarity as to what they legally need to do and what they are obliged to do. This overlapping is something that needs straightening out by all the relevant financial and government bodies soon, otherwise there will be plenty more leaseholders becoming increasingly desperate in the next few years. 

We, at Spencer, have recently become ARMA members, the recognised regulated body for block management and have grown in experience on block management over the last seven years since we opened the department. We manage various blocks city-wide now within our geographical patch and are interested in more blocks should you wish to consider us for your management. 

Contact Tom or Lynn by emailing block@spencersestateagents.co.uk 

Queen Street - NEW DEVELOPMENT FOR SALE - 24 FLATS #SHEFFIELD #CITYCENTRE

Queens Buildings is located on Queen Street in the City Centre of Sheffield. For those who don’t know it, it’s in a fantastic up and coming part of the city that is a stone’s throw away from Sheffield’s shops, bars and restaurants, the Universities, the Hallamshire hospital, and Kelham Island.

 Formerly used as offices, the building has been completely renovated to an immaculate standard by a national developer, who we have been working with from design stage. Queens Buildings offers a different kind of city centre living to the typical high rise apartment, they have been finished to an extremely high spec, all with new windows, granite worktops, and oak doors. We have noticed since working with this developer,  an incredible attention to detail, the site has been unbelievably well run and the end product looks fantastic.

We have 24 apartments, 10 one beds, and 14 two beds, and almost all of them feature a different and unique layout. The prices range from £90,000 through to £175,000, affordable city centre living that is unrivaled in its standards. There will also be parking spaces available to purchase for an additional cost. We at Spencer’s will be taking over the block management of the building, so any potential issues will be dealt with directly by us keeping management local and affordable too, and we hope you like the show flat, which is also our work.

Calling out to investors looking for a property with a great potential rental yield (in a great rental area), or first time buyers looking for a city centre home (with Help to Buy available), or anyone in between, an apartment in Queens Buildings would be a wise acquisition.

If you would like to view this exciting development please call our office on 01142683682 or email us at info@spencerestateagents.co.uk or if you are a developer that would like to work with us on a project, or want to know about our show home set up services, or our block management, please get in touch - happy to help! 

CLICK HERE FOR MORE INFO - FOR SALE QUEEN'S 

Does your agent charge hidden repair commission? WE DO NOT @spencersagents #sheffield

A More Ethical Approach to Property Management

When considering revenue streams and remuneration structures in property management, quality agents will ensure that any put in place support an ethical business culture. An area where this falters in the property management industry is the commission policies on general repairs and maintenance. Some large and well-known agents set company targets for achieving a level of commission income in this area. This creates the conditions for unethical approaches which every agency should seek to rule out.

Take a typical contract which endows the managing agent to undertake any repairs under the value of £300 at their discretion. The managing agent has three different but reliable and well-reviewed contractors on their books who can carry out the works:

·         Contractor A will charge £200.00

·         Contractor B will charge £250.00

·         Contractor C will charge £275.00

It is clear to see that where discretion is permitted the conditions of a commission target would bias the agent towards instructing Contractor C. After all, their contractual obligations are satisfied and another step is taken towards achieving their target income. However this clearly isn’t in the best interests of the client given that they are paying unnecessary costs of works which the agent can have carried out more costs effectively. It is also clear from the above example that although an agents fees may be clear in their contract, this will not shed any light on their internal targets & remuneration structures and the type of decision making they may influence.

Some agents may jump on the archaic view that this approach is perfectly ethical given that it meets all contractual obligations whilst contributing to the company’s bottom line. However ethics begins where the law (or contractual obligations) end. In this scenario it should begin when the agent is considering which instruction is in the best overall interests of the client and, all other things being equal, it is not in the best interests of the client that they incur unnecessary costs. An agent’s claim that it helped them meet their commission target would not break any ice with the paying property owner. It may be argued that such companies can put measures in place to offset the risk such as checks to ensure the most cost effective option was taken. This is not an efficient or effective means of achieving goals for any agency committed to an integrated ethical culture throughout its business.

We at Spencer are committed to encouraging just such a culture and understand that this means meeting maintenance costings with a healthy questioning attitude, free of any general maintenance fees or commissions. This approach works in the client’s best interest by providing practical and cost effective courses of action with an unbiased view of which to take. This is in contrast with the above approach aimed at achieving the highest level of commission in the quickest possible time regardless of whether it really is in the best interests of client.

At a time when agencies income streams are being squeezed it is likely that the types of commission and remuneration mentioned above will be drawn on as a way to bolster revenue. So, when seeking out a quality agent it is worth looking beyond the fees outlined in their contract and asking questions about the practices the company may have in place to achieve their targets. Their answers may shed light on whether their approaches are actually consistent with the interests of their clients and the true costs of their property management.

Speak to Spencer about our ethical stance on zero commission on any repairs on 0114 268 3682

rent@spencersestateagents.co.uk 

www.spencersestateagents.co.uk 

#Landlords - you need us, we need you! Calling #Sheffield #Investors

Calling first time landlords…we are here to help you!

Taking the plunge and letting a property out can be a nerve wracking and daunting experience for a first time landlord, especially if the property was a family home and holds sentimental value, but it doesn’t need to be that way. Of course, there are always going to be horror stories of nightmare tenants who trash houses, and TV programmes such as ‘Can’t pay we’ll take it away’ definitely don’t help this!

But I can assure you that nightmare tenants are a rarity and there are a lot of lovely tenants out there!  At Spencer we have a knack for sussing out these lovely tenants and can guide you through the rental process to make it as easy and pain free as possible from the very beginning. If you are a first time investor we can help and give advice to ensure you purchase a property that will bring you a high yield, and will rent out quickly, or if you are already a home owner we can help you ensure your property is ready to be rented and that you can achieve the maximum rental figure you are wanting.

We will spend time to get to know you and your property, we come out and meet you at a time that suits you, we instruct professional photographers, and carry out floor plans to ensure they look great in all of our marketing material, we offer accompanied viewings, and even offer evening and weekend appointments to suit potential tenants.

Throughout the process we are only a phone call away and will provide you with regular honest feedback from any viewings, once we have (hopefully very quickly) found you a tenant, we arrange for them to be financially verified, credit checked, and their previous landlord references obtained, this is to ensure that the tenant can afford the property and limits the possibility of their being any problems down the line. Before the tenant moves in we take a deposit in case of any issues, and offer an inventory service so that the condition of the property is recorded, this helps should there be any deposit disputes or damage when the tenants do move out. 

Our work however doesn’t always stop there; we do offer a fully managed service in which we deal with all of the communication with your tenants so you don’t have to! This includes us arranging any maintenance work required & completing regular inspections to ensure the property is looked after, we can contact you only in emergencies if that suits you or can update you when issues arise.  

So If you are a landlord looking to rent out your property, please contact us so we can make the process as enjoyable for you as possible! 

Emily Rumsby is our Lettings and Block Management expert here at Spencer. Please call us to come in and have an informal chat about your management requirements and any lettings advice you need. We are at 469 Ecclesall Road, and you can reach us on 0114 268 3682 or by emailing rent@spencersestateagents.co.uk 

Spencer of #Sheffield Service Charge Budgets for New Block Developments

Service Charge Budgets for New Block Developments

The average service charge in the UK reached almost £1,900 per annum in 2016 (Direct Line for Business, 2016), up over 30% from 2014, and is set to continue rising with the growth of developments. It is more important than ever for tenants and leaseholders to understand how agents put together and manage service charges particularly for new developments.  

We at Spencer understand that service charges must be reasonable and, as with any budget, must serve a plan which ensures effective block management without any nasty surprises. Sadly, some managing agents have been known to purposely keep the initial service charge low in order to attract leaseholders and tenants to new blocks only to hike prices or request further funds at a later date. This is not the Spencer way.

New block developers normally require a service charge budget long before the development is completed. A key challenge in setting up the initial budget for new developments is the uncertainty around the costing, particularly the more fixed items such as insurances and utilities. This creates further challenges if there happens to be a shortfall. One is appearing as an agent intentionally underestimating the true costs of service charge in order to secure leaseholders and tenants. Another, which everyone wants to avoid, is requesting further funds to cover costs!       

Both challenges can be overcome with research and by erring on the side of caution when putting together the initial budget. This means gathering estimates based on as much current information as possible about the development, making comparisons with similar bocks, analysing the market, and even overestimating to a reasonable degree. This way costs are estimated as accurately as possible and a more flexible plan put in place.  

Once the block is completed and the more fixed cost items take shape we may find that some are greater than estimated. Perhaps the block was a redevelopment of an old building which requires annual asbestos inspections or the door entry and smoke ventilation systems require greater management than anticipated. Managing any shortfalls without delivering a nasty surprise can be found in the more flexible areas of the budget.

The more flexible areas are those which can be changed at relative ease and short notice; key examples are frequency of cleaning or lift service visits. Once the block is fully occupied we may find that the frequency of cleaning can be reduced while still maintaining a clean block. Such changes free up the funds needed for to cover the shortfalls in the more fixed areas of the budget. Any surplus monies can then be placed into a sinking fund or even reimbursed to leaseholders at the end of the year. Far better than the alternative! 

The key is to develop a reasonable service charge budget with the initial information available which can also deliver the plan it is developed for; to allow the agent to effectively manage all aspects of the block without any nasty surprises for the residents. 

Ashley Elliott is Spencer's Accountant and Expert in Property Maintenance costings - he is Spencer's Right-hand man! 

WHO IS ASH?