Salary Survey 2011 - sponsored by Foundation Recruitment
Salaries in the property industry are still falling as the effects of the recession continue to bite.
According to the 20th annual Estates Gazette/Foundation Recruitment salary survey, the average property industry salary this year is £47,186, marking a third year of salary falls.
This year's survey, compiled after questioning nearly 1,200 property professionals about their pay in January, shows that the average salary has fallen from £48,721 in last year's survey and from £51,180 in 2009.
Moreover, it reveals that more than one in five of those questioned (21%) have been made redundant in the past three years.
Average bonuses also fell slightly - by 1.5% from £5,884, reported in January 2010, to £5,793 this time. This is still a long way off the much higher levels the property industry had grown used to during the boom, when in 2007 the average bonus peaked at £11,670.
But the results are also a strong indication that the job market may be starting to stabilise.
The average annual fee income earned per respondent increased 3.1% to £159,102 from the 2010 level of £154,154. But this was a far cry from the heady days of 2009 when it stood at £192,900.
"We are seeing a general improvement, and this is coming across in several ways," says Julian Long, managing director of Foundation Recruitment, which compiled the survey jointly with EG. "There is improved optimism for 2011 from employers, and a notable slowdown in redundancies - in some areas it has stopped.
"There is also an increase in demand for individuals within certain disciplines; in particular, retail estate management, general property management and strategic asset management."
"While a high number of individuals still remain out of work, opportunities are beginning to present themselves more frequently, and there certainly is a sense that job seekers are feeling more positive - they are attending more interviews and so on," he adds. "Some candidates we are dealing with are beginning to feel that they have a 'claim' to a higher bonus this year."
Nonetheless, although there are clear signs of improvements for some, perhaps one of the most striking results of this year's survey is that salary performance varies greatly - not only between different job functions but also across different regions (see chart, pp 64-65).
Similarly, the survey shows that salaries vary significantly across the UK.
On average, those in Greater London are the highest earners, taking home £51,719 in basic pay, while those in the North West earn the least, at £42,470.
Although 2011 sees some narrowing of the gender gap, the average man in the property industry still earns around £10,000 more than the average woman - £50,362 for him compared with just £40,258 for her.
The 2011 survey shows that salaries are spread relatively evenly between those in smaller and those in larger firms. Employees who worked for firms with a staff of 1-20 people earned on average £45,061, while those in the biggest firms comprising more than 3,000 staff earned an average of £49,006.
"We have seen a number of the big firms going back to their shareholders over recent years, to a large degree because they have got their remuneration wrong, and for a few of them it was a close call on a number of occasions," says Graham Chase, managing partner of retail specialist Chase & Partners.
"As a smaller cap, we can't afford to get things like that wrong and make inflexible arrangements in what is, as we have seen, a very changeable marketplace."
Looking to the future, 38% of those surveyed expect their firms to increase in size during 2011 as the industry returns to growth, slightly more than the 33% who predict employee numbers will remain static, and far higher than the 16% who fear more redundancies.
Change in average salary and bonus
The past 10 years have seen salaries and bonuses rise steadily within the property industry before falling rapidly when recession hit. In 2007, the average respondent earned £51,359 plus another £11,670 in bonus payments. The 2011 survey shows that both salaries and bonuses continue to fall.
Average current salary by region
Property industry salaries vary significantly across the UK. Unsurprisingly, those in Greater London earn the most, while those in the North West earn the least. London respondents expect to receive the highest increase next year (3%), while those in Scotland expect just 0.7%.
Average salary by type of work
One striking outcome of this year's survey is that salary performance varies greatly - not only between different job functions but also across different areas of the country. Portfolio managers earn the most, according to the poll, with an average of £58,092. This is nearly one-third more than those on the lowest salaries, such as commercial valuation surveyors, who, on average, take home a basic salary of £36,575.
Graham Chase, senior partner, Chase & Partners: "I am surprised to see development surveyors so high up this list. However, I am not surprised to see that salaries in this category have fallen significantly. Demand for retail development, for example, has fallen significantly, and it will be one of the last areas of the business to pick up."
Shaun Gorvin, senior director, central London offices , BNP Paribas Real Estate: "Investment agents are paid more than most as we are able to deliver attractive opportunities and add value. Investment surveyors are at the sharp end, trying to find opportunities, and if we do are rewarded appropriately. Unlike some of the other job functions mentioned, we find new business."
Nigel Mapp, managing director, niche agent MJ Mapp: "Clearly, there are huge differentials dependent upon experience, but this looks about right for a property manager below associate status. But I am sure there hasn't been a 10% increase in salary levels since last year, though . Property managers are in demand because of a continued focus on collection rates and tenant retention."
Dan Bayley, senior director, London office agency, BNP Paribas Real Estate: "Office agency has had a tough few years. A lot of firms have undertaken salary reductions. We issued letters cutting salaries by 10% but in the end that didn't happen. Now in central London we are likely to see salaries go up again marginally. However office agents outside central London are still struggling."
Tim Catterall, partner, Sanderson Weatherall: "With the recession ongoing, management skills are coming to the surface, so we are seeing a widening difference in salaries. I have noted various sectors improving, so I expect to see salary increases for valuation, rating and investment surveyors. Also, the best fee earners in the transactional market will do well."
David Eaden, surveyor, transaction group, Drivers Jonas Deloitte: "I started out as a new graduate on the same day Northern Rock went to the Bank of England. The recession probably delayed my pay expectations by 12-18 months. However, I consider DJD to be bang on the market for salaries for my grade, and is a fair reflection of my level of experience and value to the firm."
Michael Vaughan-Johns, director of portfolio management, Capco: "It certainly isn't a shock to see portfolio managers topping the salary list. In the current market, and over the next few years, it will be these teams that will deliver. There still aren't a huge number of individuals with the sort of skill set to do this, and they are in considerable demand."
Expected change in number of employees in 2011
When asked how they thought staff numbers would change within their own place of work during 2011, respondents were relatively upbeat. Most (38%) predicted that their employers would take on staff.
The survey shows that more than a fifth of the property professionals questioned had been made redundant over the past three years. When asked what reasons they had for joining their current employer, many of the respondents cited having been made redundant not just in the last recession but also the recession in the 1990s.
Men and women
The gender gap within the property industry is narrowing. The difference between the average man's salary and the average woman's salary appears to have halved since the recession.