My piece two weeks ago highlighting a two-tier bonus system within the agency community seems to have set the cat amongst the pigeons. There have always been differences between firms, departments and colleagues, of course, but in austere times resentment runs high.
Given it is classic water-cooler fodder, I make no apologies for returning to the topic so soon, especially as the latest EG salary survey shows these differentials are likely to become more entrenched (see page 62).
Salary recovery always lags market recovery, so it shouldn’t surprise that property’s average wage has suffered a third consecutive annual fall. (Lest we think that’s bad, the survey also shows that as many as one in five property professionals has first-hand experience of redundancy in the past three years.)
Half of the 1,200 respondents to the poll, sponsored by Foundation Recruitment, received no bonus last year. But it’s delving deeper into the size of pay rises that is most revealing.
Those working in office agency led the way, trousering an average 3.4% rise. Investment topped 3% too. Valuation brought up the rear at 1.4%.
But property management is perhaps the most interesting area. By common consensus this unglamorous discipline had a good 2010. Yet pay rises here were below average at 1.7%. Their average bonus of £4,200 was down on the average (£5,800) too – and less than one-third of that earned by investment agents (£16,000).
No one at Knight Frank will thank me for the parallel, but I came away from Tuesday’s central London forecast breakfast – among the most significant of property’s annual round of previews – thinking of Gordon Brown.
Don’t get me wrong, I was thinking of Brown in his early pomp – a bold, confident and often lucky chancellor. Back then he had a habit of announcing growth forecasts that were widely derided by independent forecasters. Yet he had an uncanny knack of delivering the numbers. Of course, his luck soon ran out – long before he became PM – and downward revisions became the norm.
So where’s the parallel? Well, Knight Frank’s forecasts this week were decidedly optimistic. So much so that many of those who gathered at Park Lane’s swanky Dorchester hotel to hear their presentation wondered whether the firm was getting a little carried away (page 40).
In bare numbers, KF is forecasting prime office rents in the West End of London will climb 18% to £100 per sq ft this year. In the City it is anticipating a 9% hike to £60 per sq ft in 2011 and a further surge to £67.50 per sq ft next year.
There are sound underlying reasons why we may reach those heady heights – chief among them a shortage of supply, a favourable exchange rate, expansion in key business sectors and international confidence in London.
Nevertheless, those are bold calls. Everyone will hope the firm is right and, just as it did in Brown’s early days, the market delivers. A fair few will fear that the climate bodes ill, and like Brown in his later years as chancellor we fail to touch those anticipated heights.
EG continues to bring you the big ministerial interviews. After last month’s piece on Greg Clark, our Residential Focus catches up with housing minister Grant Schapps. He promises to make UK homes bigger and better – read all about it on page 58.
Also this week EGi caught up with Schapps’ boss, communities secretary Eric Pickles. Speaking about how much could be saved through property management, Pickles said: “Every council could save millions by managing their properties better, using the money to protect frontline services or keep council tax down.” Subscribers can hear the podcast on EGi.
