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Which property organisation is right for you?

publication date: Aug 24, 2009
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In fact, it’s not as complex as it seems, says Peter Bolton King, Group Chief Executive of umbrella organisation NFOPP, which counts NAEA and ARLA among its constituent organisations. He points out that organisations tend to specialise, whether by representing a particular type of member (estate agents, landlords, owners or developers), or by specialising in a particular area.

“If one puts on one side the RICS, which is a different animal to some extent with its royal charter and its regulatory role, the others are either specialised small organisations or general large ones,” he says, “and there aren’t that many.”

For instance the lettings sector appears to be heavily over-organised, with ARLA, ARMA, The Guild of Letting & Management, the RLA, and NALS. But in fact each organisation exists for a different reason. ARLA is for lettings agents, the RLA is for landlords, ARMA is highly specialised, for managing agents of leasehold properties, and NALS is not a trade organisation but a regulatory scheme. There’s overlap, but no great duplication.

ARLA is the larger of the two lettings associations, with a high profile and several thousand members but the (smaller) Guild of Letting & Management (GLM) offers education, resources, information, and membership for letting agents, managing agents, private landlords and local authorities. It has no affiliation to residential sales, focusing on the private rented sector. Susie Crolla Chief Executive, says, “GLM offers qualifications which certify competence and professionalism in the form of vocational BTEC qualifications. GLM is a partner for those wanting to develop their career in lettings and management”.

Caroline Pickering, NALS Chair, says “The National Approved Letting Scheme – otherwise known as NALS – is the only Government-recognised scheme for lettings and management agents in the private rented sector. We have strict criteria which they must adhere to in order to hold accreditation. NALS’ purpose is two-fold: to offer consumers peace of mind when using the services of a lettings and management agent and to provide agents with continuous best practice guidance and an industry kitemark that is synonymous with responsibility and security. NALS is an open access scheme with a strong consumer focus – which is how we differ from trade associations who represent the interests of their members.”

According to Peter Bolton King, there’s no other general agency organisation other than the 10,000 member strong NAEA. “The Guild of Professional Estate Agents is really a marketing brand,” he says. “They don’t have the same interest we do in training, advice and support.” It also numbers only 700 agents. The same is true of the Independent Network of Estate Agents, which is largely a marketing group and property portal.

What is interesting, and does muddy the waters a little here, is that the NAEA also operates a property portal, PropertyLive. co.uk. This was launched in response to members’ concerns about the cost of advertising on some of the major property portals and it is provided free of charge to principal, partner and director members. About 50 per cent of eligible members have signed up.

David Hewett, Chief Executive of ARMA, runs one of the smaller and more specialised trade bodies. Apart from the even more specialised Association of which is specifically focused Retirement Housing Managers, he says, “We’re the only body on residential leasehold management.” He claims ARMA represents managers of about 80 per cent of all managed leaseholds – some 850-900,000 properties in 35,000 blocks. For his members, focus is important. The job of a managing agent is quite different from that of a lettings agent or surveyor, and, “they come to us because we provide focused, specific support for their management agency business.”

Other smaller organisations such as ICBA also have a specific focus – in this case on the business transfer sector, which has a rather different skill set from the chartered surveyors’.

Membership size differs greatly. NAEA had 10,500 members at its peak, though with the recession this has dropped to 9,000 – applications are increasing again now. ARLA membership is increasing, with around 3,500 member offices. As a very tightly targeted organisation ARMA has only 200 members while RICS is the ‘gorilla’ in the sector. Louis Armstrong, Chief Executive Officer, RICS, says,

“RICS is different from other organisations in the property sector. We are a professional body with a Royal Charter which places on us a responsibility to regulate our members and to act in the public interest. RICS also covers a wide range of sectors providing the leading professional qualification for all aspects of land, property,construction and related environmental issues. We have a global membership of some 100,000 professionals and over 50,000 trainees in 100 countries.

“However, we are also very active in the UK residential sector, setting standards and providing guidance. We recently launched a definitive guide for estate agents, the Blue Book. This will raise agency standards but will also improve the consumers’ experience of the home buying and selling process. In addition, we also supply information and market commentary – especially through our leading housing market survey – and work with other sector groups and the government, to raise standards and improve efficiency.”

The numbers are slightly misleading, though, as some organisations admit corporate members, while others only admit individuals. The BPF has mainly corporate members; NAEA and RICS individuals. Meanwhile, ARLA was previously corporate, but is now moving to an individual membership basis. This appears to be going well, with only four out of 865 firms deciding to remain outside the new membership structure.

Trade associations differ in their objectives as well as their membership. RICS for instance is a professional body which awards certification and has a regulatory role; to some extent you could compare it to one of the accountancy bodies. The British Property Federation on the other hand is primarily a lobbying force, as Andrew Teacher explains. “We’re a lobbying body for the industry – property investors and developers, big retailers, agents, planners and investment funds.”

The various trade bodies do admit that they overlap, but in a complex industry, that’s always likely to happen. David Hewett for instance says that of his 225 corporate members, 84 are also RICS registered. Peter Bolton King notes that “An awful lot of members of NAVA – which is part of NFOPP – are chartered surveyors too, so they obviously feel we offer something they’re not getting elsewhere, or from RICS.”

Part of NFOPP’s work has been to simplify the structure of trade organisations. Because a sizable number of estate agency firms have an overlap within them between lettings and sales business, NFOPP is about to roll out dual membership of NAEA and ARLA. But Bolton King sees nothing wrong with multiple memberships – and doesn’t see his organisation as in competition with RICS. He says, “We operate jointly with RICS where it’s clearly in our members’ interest,” for instance on anti-money laundering measures. It’s much stronger talking to Government as an industry, rather than going as separate organisations and letting them pick you off one by one.” He does consider, though, that it’s the industry might have different agendas – for instance, estate agents and property investors might not always have the same interests – they are adequately represented.

Andrew Teacher is a spokeperson for the British Property Federation (BPF), which represents property owners and developers. He says, “We work with the RICS in various groups – they’re a professional body, we’re a lobbying body, so we can cooperate well.” Across the industry, most of the trade bodies work together – so perhaps it’s not surprising that in the case of NAEA, ARLA, NAVA and ICBA, that’s led to the creation of NFOPP as an umbrella organisation and the provision of some services jointly between the bodies.

What can the trade bodies offer their members? Many offer significant resource to help their members cope with regulatory change. David Hewett says that’s important for ARMA. “There’s a lot going on in regulation, a lot of changes to cope with, and we can be a source for information for our members.” NAEA operates free advice lines for its members on legal matters. Training is a particular focus for many organisations. David Hewett is justifiably proud of the qualification offered by the Institute of Residential Property Management, which was launched by ARMA in 2002. He points out that over a thousand people went through training in the lastyear – that’s a significant slice of the estimated 7,000 or so working in the sector. Peter Bolton King says NFOPP has made training a priority. Indeed NFOPP’s status as an independent awarding body for qualifications was one of the reasons other trade bodies decided to join. Over six thousand people have now taken awards, both at NVQ level 3 and at diploma level.

NAEA focused on improving training even before the government made minimum competence levels mandatory for sales agents. “We’ve been banging on a lot about minimum competency and so on,” he says, “and now we’ve got moving and actually set the schemes up.”

He believes the qualifications have helped bring down the average age to 36 within NAEA, against what he thinks is about 57 for RICS members. He also sees some signs of training attracting women to the organisation. “There are a lot of women working in the sector, yet the trade organisations are still male dominated.”

However, trade bodies should not be seen simply as vehicles for delivering benefits directly to their members. They also have an important role in coordinating the industry’s response to government proposals. Lobbying is one of their major tasks. Andrew Teacher says it’s not just a question of responding to proposals. “We’re trying to drive policy rather than simply responding to it, he says.” That can involve many different areas. The BPF is currently involved with a huge number of different issues, from the credit crunch to planning issues, regulation of landlords, and even housing benefit.

The trade bodies also have an increasingly important part to play in managing public perception of the industry – which hasn’t always been complimentary. After all estate agents are not many people’s favourite professionals. FOPDAC, now part of NAEA, was instrumental in trying to improve the reputation of overseas property developers and agents, and introducing tighter rules.

The codes of practice which members must adhere to, as well as complaints and redress schemes, are important in this regard. So are the professional and public liability insurances that are provided by many of the trade bodies. Many sales and lettings agents are now stressing their membership of NAEA and ARLA.

David Hewett says ARMA maintains quite a stringent admissions process; NAEA, too, has tight member criteria.

So, which trade body should a company or an individual choose? There’s no easy answer; it might not even be a single choice, but a choice of two or even three bodies. And though that may seem confusing, given the complexity of the industry and the number of different specialisations within it, we’re just going to have to live with it



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