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Block Management Companies Challenged By Unprofitable Growth

The Fixflo Leasehold and Block Management Market Report has found that although most block management companies have achieved portfolio growth, they are struggling to translate that increase in revenue and workload into increased profits.

The Report which was supported by ARMA, MRI Software, News On The Block and Flat Living received responses from more than 170 block management companies which according to ARMA figures equates to more than 19% of the block management market.

Within the headline figure of 95% of respondents having experienced portfolio growth over the past 5 years, two distinct cohorts emerge with just under half of respondent businesses growing at more than 35% over that time period with a quarter having significantly slower growth at less than 10%.

Unsurprisingly, there is a strong correlation between the use of specialist technology to assist property managers and a company’s ability to scale its business with over three-quarters of those companies in the top tier of growth (35%+) having invested in specialist block management software. Interestingly, those companies that made further investment in add-on solutions for repairs and maintenance have the highest number of leasehold units managed per property manager. Block Management Companies surveyed, as a whole, are taking a proactive approach with repairs and maintenance technologies. When asked about how likely they would invest in software to help manage different block management processes, Repairs & Maintenance came up top. 

While 60% of respondents expressed that the upcoming regulation of managing agents poses a challenge to their professional career, over 75% of all individuals surveyed agreed that a higher barrier to entry will prevent rogue agents from (re)entering the market. 

The wide ranging “state of the sector” report also looks at the expansion of businesses into Build To Rent, disruption brought about by commonhold and biggest concerns identified by block management companies in the short term. It also provides block management companies with an opportunity to benchmark their business performance.

  • The Fixflo Leasehold and Block Management Market Report was presented at the ARMA Conference on 17 October 2019
  • A full copy of the report can be accessed here