Does real estate have a class issue

We recently ran a poll on whether a lack of representation in class and socio-economic backgrounds needs to be addressed.

Our industry often talks about improving gender and ethnic diversity, which is something we truly believe in. However, we wanted to gauge whether organisations within the sector believed that the class and socio-economic representation gap should be addressed too.

Asking the question ‘Is there a class issue in real estate?’, we gave four options to choose from. The poll received 173 votes broken down as follows:

  • Yes, it’s very prevalent – 65% of votes
  • Yes, but it’s changing quickly – 14% of votes
  • No, there’s no issue – 15% of votes
  • Not thought about it before – 6% vote

While 173 votes only provide a snapshot, it still showed that 79% believe there is a class issue in real estate. Begging the question, why?

Below, we’ll explore how a divide is prevalent, why it should be addressed and how we can make a change.

Why is there a class issue within our industry?

In late 2020, research undertaken by The Bridge Group titled ‘Socio-economic diversity in the real estate sector’ found that professionals in commercial real estate are disproportionately from higher socio-economic backgrounds.

While our sector is (rightly) focused on improving the representation of more women and better ethnic diversity, often socio-economic backgrounds are ignored in these efforts. However, in some cases, the two may go hand in hand.

Collecting data from 12 participating organisations in the UK, the research found that over 45% of their employees had come from private, independent or selective state schools in the UK. However, the national average shows that only 12% of the UK population attended either of these as children, showing a clear ‘leg up’ for those who were privately educated.

  • One participant said – “Property is about who you know. At graduation, people are listening out for names they recognise: ‘Oh that’s so and so’s son, that’s so and so’s nephew’. The family influence remains strong.”
  • Another said – “What is it about signet rings? Clearly part of some family connection secret code that I’m excluded from.”
  • Investment property management as a subsector seems to have more of a ‘lad culture’, fueled by the ‘old boy’s network’.

Edward Collins

Associate Director, Macdonald & Company, Manchester

Those with higher socio-economic statuses tend to be seen as more visible within the company, able to create stronger connections with leadership and therefore more privy to ‘deals’ and promotion opportunities.

Sadly, these findings show that nepotism, family connections and socio-economic backgrounds still play a key part in hiring for entry-level positions and beyond. Those with higher socio-economic statuses tend to be seen as more visible within the company, able to create stronger connections with leadership and therefore more privy to ‘deals’ and promotion opportunities.

As well as this, the real estate firms that took part in this research have a smaller proportion of staff from lower socio-economic backgrounds (27%) than leading accountancy firms, finance firms and the population of UK CEOs. Interestingly, the study also highlighted that those from lower socio-economic backgrounds may struggle to access and afford the training required to even get a start in the sector.

And those who do get involved at higher education or university level – which is much more socio-economically diverse than is represented in the sector itself – don’t have the time to attend evening events or networking opportunities, as they often have part-time jobs to supplement their income. Those from higher socio-economic backgrounds are more likely to be able to do so.

However, there is a light at the end of the tunnel, with some participants of the research noting the following:

Poll Participant

It used to be very clubby and arrogant - a bit of a boy’s club. It was a public-school educated rugby playing man who fitted well into the real estate environment… and went off at lunchtime and had a few pints of beer. But a lot of that has gone away.

Poll Participant

People are a lot more aware now and catch people out. Some things are no longer acceptable.

So, how and why should we improve real estate diversity and inclusion?

Improving the pipelining

The level of ethnic, gender and socio-economic diversity at university level for real estate isn’t less than other courses in this sector. This shows that the imbalance isn’t necessarily caused by a lack of early interest in real estate. So, the issue seems to come from either a misunderstanding of how and where to get started or barriers to entry at the management level within firms.

Two ways to improve this include real estate businesses publicising internships and entry-level positions, rather than networks and family connections. This must also include universally easily accessible ways to find these opportunities, such as on online job boards.

Cultural & behavioural changes

With reports of ‘lad culture’, jokes around accents, forms of dress and ethnic origins arising from the study, businesses need to have a zero-tolerance policy on this behaviour to create inclusive working environments.

Collecting data & progress tracking

Firms should consider internal data on the backgrounds, demographics and educational backgrounds of their staff. This can then be tracked on an ongoing basis as new staff join the company to crucially monitor progress.

Creating transparency

The research also highlighted a perceived lack of transparency in the way that leads and opportunities are shared by middle management. As well as this, some participants felt that transparency on pay rises and promotions was lacking and that those with a closer or ‘better’ cultural common ground with middle management were more likely to grow within the business. This is often due to middle management autonomy, so upper management may need to reduce this by having the final sign-off on such decisions.

Improved internal transparency and communication here is critical, and the information on how to achieve promotions, pay rises and an accelerated career path needs to be more formalised and better communicated across the entire business.

While the findings of the Bridge Group research were stark, there is hope as larger firms seem to be taking a more proactive and modern approach to real estate inclusion. However, there is still a long way to go, with potentially 21% of those within the sector failing to acknowledge that the issue even exists.

By familiarising ourselves with the research and findings and taking the above steps to improve this, hopefully, over time, we can improve class diversity and inclusion within real estate.

Want to see more?

Browse all our live vacancies to find your next opportunity.

Subscribe to RE:MAIL

Everything real estate to learn, collaborate and connect. Sign up for your monthly roundup of industry news, insights, career podcasts with industry leaders and more.