Despite some evidence of sustained demand for residential rental property 79% are worried, the report from independent broker Pi-Property Insurance shows.
Yet there is a lot of optimism with more than half of the 500 property managers taking part in the survey saying that expect demand for residential rental property to increase in the year ahead. Some 51% of property managers are expecting demand for commercial property to stay the same or fall in the year ahead.
The effect of the recession is likely to vary according to the situation facing companies. 'Demand for commercial and residential rental property has become increasingly polarised during the downturn and as a result, some property management companies are more exposed to the effects of the current recession than others,' said Don Morrison, managing director at Pi-Property Insurance.
The report identifies the top challenges facing property management companies in the current economic climate. Attracting viable tenants is the main challenge according to 62% of the respondents, followed by controlling costs (38%) and reducing risk (30%). Other challenges include staying compliant, despite a growing amount of red tape.
'The industry is striving to balance cost and risk, while staying compliant and reducing the administrative burden on their business. With these challenges in mind, one in four (29%) property managers have already identified that insurance is a growing priority and we expect more property managers to review the insurance cover they provide to landlords in the future,' added Morrison.
The recent introduction of Financial Services Authority regulation controlling the sale of insurance combined with greater cost-sensitivity among landlords, has added to the frustrations for property managers.
'Insurance is an increasingly important issue for landlords and property managers alike. While cost is always going to be a big factor, we are finding that more property managers want to provide landlords with access to insurance products that are comprehensive in terms of cover and hassle-free in terms of ongoing service,' Morrison concluded.
