The nation’s biggest annual survey of Resident Directors has revealed that good financial planning is top on the agenda for resident management companies (RMCs) and right to manage companies (RTMs) who are navigating complex evolving requirements.
With cost-of-living pressures and enhanced fire safety requirements as the backdrop, Resident Directors are prioritising tight control of service charge budgets more than ever, with 68% of Directors citing it as their top priority, up by a fifth in the last year, according to FirstPort’s third annual Resident Director Survey.
RMC and RTM Directors – who are volunteers appointed by their fellow leaseholders to manage and maintain the common areas and ensure compliance with the deeds or lease for each home – are continuing to pay increasingly close attention to their budgets and many have seen a shift in how their funds are allocated.
As well as ensuring service charge budgets are accurate, 38% of respondents said they prioritised ensuring they maintained a healthy reserve fund. Directors have also reviewed how funds are spent in other areas, including costs related to maintenance.
Co-ordinating essential works remains a key part of a Director’s role, with 43% naming repairs and maintenance among their priority areas. However, this figure is down 14% on 2022, suggesting residents could be willing to delay non-essential upgrades to ensure they are prepared for more critical works.
Significant legislation changes like the Fire Safety (England) Regulations 2022, which came into effect in January 2023, adds layers of complexity to the work of Resident Directors.
Of those surveyed, 45% of Resident Directors felt they did not understand the role well, with almost half (48%), saying the role took up more time than they expected. 37% said they were not currently satisfied in the role. Many cited time constraints, as well as a lack of understanding of their duties, for their current dissatisfaction.
However, many Directors continue to adapt to the changing priorities, with 75% saying they understand and contribute to decisions on how service charge monies are spent. For the second successive year, 59% of respondents said they expect to remain in their role beyond the next three years.
This report builds on last year’s findings, considers the growing and changing priorities for Resident Directors, and what managing agents can do to best support them.
Kully Sahdra, Managing Director at FirstPort commented: “The role of a Resident Director is ever evolving, more so than ever over the last year. Economic factors and legislative changes require Directors to not only keep abreast of the landscape, but to take swift and appropriate actions to continually ensure the most effective management of their development.
“A collaborative approach with a professional property manager can hugely benefit Resident Directors, providing extensive experience and dedicated resource and, importantly, up-to-date guidance on the issues that affect residential developments. This helps them to successfully navigate their duties and make sure their homes are a great place to live for their neighbours and communities.”
To read the report in full, and find out more about FirstPort, please click here.