13 November 2000
12 November 2001
31 July 2000
26 July 2004
5 December 2007
23 June 1998
Almost all of the property world is in turmoil. The only real exception is the old guard at the top. Evolution and revolution are changing the structure of the property market, the nature of property assets, the way that property is financed and the people who both invest and advise. Yet, for some reason, the apex of the industry has not been struck by the same dynamic. Why?
The geographical boundaries of property are changing. UK property companies have ventured overseas and numerous European, Asian and Australian property companies have energised the UK property market.
The intellectual boundaries of property have also changed. Property used to be staid; sales and purchases were relatively simple, leases were often in a standard form, and finance was generally debt-based. That has all changed. Even the accountants have caught up, finally working out that leases are often dreadful liabilities, tying occupiers into long-term commitments that fail to match real commercial expectations. The use of new vehicles (such as limited partnerships) to hold property and the securitisation of rental streams have brought changes that five years ago were uncontemplated.
The Government has also played its part. The planning system has re-focused property attention back towards town centres. Further encouragement of mixed use schemes has seen the emergence of different uses set alongside each other. An increasing willingness to use compulsory purchase powers with a fundamental review ongoing, has introduced more flexibility and potential market liquidity. At local government level, the changes have been even more radical. There is a new system of government. The Greater London Authority and regional assemblies have liberated the property industry in some respects. The outspoken views of Ken Livingstone enthusing about, and encouraging, tall buildings has given the industry a visionary champion that it previously lacked.
The professional support for the property industry has reflected these changes. Electronic trading of properties is threatening the agent's position and traditional agents' practices look likely to subside gently in the same way as the trading floors of the London Stock Exchange have declined. The need is much more for property advisers rather than individual architects, planners, lawyers and quantity surveyors, with the territorial battles they can cause.
To a large extent they are as happy talking about social capital as they are about financial. Maintaining a dialogue between Government, community and the private sector is a core skill.
Pure property lawyers have also evolved and it is unlikely that there will be many left in 10 years. Certainly, they will not be pigeonholing themselves as such. Many will have developed into private finance initiative or public private partnership advisers. Others will deal with cradle to grave development projects, acting as agent, adviser and facilitator. Those with softer skills will be property advocates, replacing some of the stuffiness of the bar and looking at a more informal approach to resolving property disputes.
But there is still a rock against which this tide of change laps. The same characters head the property industries as they did a decade ago. A recent property award went to Gerald Ronson. That is hardly a vote for the future. The committees of the great and good are full of people of a different generation with little genuinely new to contribute.
The ongoing changes in the property market should be led by those who are making the changes happen. Unless there is a sea change, there is a risk that the property industry will not be able to deliver what is needed during the next 10 years. There is a need for some of the old guard to step aside.
Stephen Ashworth is head of property at Denton Wilde Sapte.
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