Property Management - Rising Material Costs
I think that I can speak for everyone within the property industry and even those fanatic DIYers, that over the past few months we have all noticed a huge increase in material costs.
When planning major works as a Property Manager, we need to decide if the costs will exceed £250 per unit. If they do, we are obligated to carry out the Section 20 process, which can take 2-3 months to complete. Quotes are obtained and costs are relayed back to all Leaseholders for any comments or recommendations. I am finding that contractors will not hold their quotes for more than 7 days, which makes the Section 20 process almost impossible to fulfil.
On some projects, I have had to include a large contingency to cover the risk of a material increase. Leaseholders are becoming frustrated that costs are rising, and in most cases believe that we or the contractor are trying to make a quick buck! This is definitely not the case.
The effects of the Pandemic and Brexit have also put a strain on the industry. People have been unable to go on holiday, thus, using their time and money to refurbish their homes and gardens. All tradesmen are extremely busy, I have certainly noticed the struggle in completing works in a timely manner as smaller companies just do not have the manpower to fulfil the demand.
Unfortunately, there are no guarantees that material costs will decrease. We are having to work with contractors and Leaseholders as best we can to make major works happen. I try to be open and honest with Leaseholders so that there are no unexpected costs thrown at them at the last minute.
After a tough 18 months I feel that this has made our jobs much harder. We have had to obtain revised quotes, re-issue notices to all Leaseholders and in some cases go through the lengthy Section 20 process again. When the increase in costs have exceeded the amount in the Reserve Fund, we have had to collect further money from Leaseholders. This has caused huge delays and upset amongst the Leaseholders.
It doesn’t appear that materials will decrease in cost, we can only manage the situation as best we can and plan future works knowing more than we did a few months ago.