Author: Andrew Peters, Building Surveyor at EK London.
The current economic and financial climate we are currently faced with poses great uncertainty. At the time of writing this article, households across the country are faced with a cost of living crisis and soaring energy prices. Naturally, many households are looking to reduce costs and save money. For property managers, that means pressure to keep service charges down, even as the costs of maintaining their buildings are exponentially increasing.
Tempting as it is to cut down on all expenditure, wise property managers know that will be a false economy. Failure to deal with maintenance issues as they arise and to anticipate more serious problems before they occur, will only lead to greater expenditure. The good news is the reverse can also be true. Smart investment and effective planning can save huge amounts of money in the longer term, and rationalise expenditure.
The key point is that while aesthetic renovation plans can be put on hold, the natural deterioration of buildings cannot be wished away. Everyday wear and tear means all buildings develop their own defects and issues over time which must be addressed to prevent further deterioration. Careful maintenance is necessary to keep them fully functional. Moreover, changing legislation and statutory requirements mean the standards by which properties are judged can be a moving target. In those circumstances, genuinely smart investment often requires expert help.
The key tool required for accurate, bespoke and detailed forecasting is the use of planned preventative maintenance or PPM programmes (previously known as a planned maintenance programme or PMP). This covers everything with the building fabric (and can also include M&E installations). The process begins with the surveyor undertaking a detailed survey of the building to identify defects and this means any necessary work can be prioritised. For example, if any significant movement is identified early enough, works can be scheduled early to prohibit further deterioration. Crucially, this also means any structural work is carried out all at once, creating economies of scale in terms of fixed costs like scaffolding. Experience to date has found many of our clients have budgetary issues – in these scenarios, the works can take a phased approach to suit the client’s needs.
In the longer term, the surveyor will help the property manager understand the building holistically, and anticipate the kinds of works that might be required as part of upcoming maintenance cycles. This provides property managers with aforecast of future expenditure. This in turn enables them to set reliable levels of service charge expenditure or reserve funds for the cost of future repair and maintenance of a building. It also helps clarify priorities and enables effective ‘triage’ at those times like now when budgets are tight.
Firms of surveyors regulated by the RICS are required to provide reasoned and impartial advice, so a comprehensive PPM also provides objective evidence so that leaseholders can see the charges they are being asked to pay are not arbitrary or excessive. This also helps prevent disputes between the various leaseholders responsible for paying for maintenance, which in turn mitigates the need for expensive conflict resolution.
Of course, it is impossible to be absolutely definitive about future costs, as other factors such as inflation and costs of materials are subject to change. Nevertheless, a professionally produced PPM greatly reduces the number of ‘moving parts’ at play when it comes to anticipating costs.
In addition to using the services of a chartered building surveyor, many property managers also seek the advice of building consultants, especially when it comes to major works. A good building consultancy will have a more detailed understanding of different repair methods, of which are more appropriate in different circumstances, and of course which are most economical. They will also bring a higher-level understanding of the construction of the property, any defects and the required repairs. This allows them to provide carefully evidenced advice on what to do and when.
The expert advice, whether from a chartered surveyor, a building consultancy or both, might well be to swallow higher upfront costs if that allows for lower expenditure over time. The goal is to keep costs down over the long-term, and to ensure the long-term health of the buildings in question. This means that, over time, the right expert advice more than pays for itself.
