In the latest of Blackstock Consulting’s PropCast series, Pocket Living’s Marc Vlessing and Nick Cuff join Blackstock Consulting’s Andrew Teacher to discuss their approach to providing affordable modular homes to middle-income earners, or “city makers”, in London.
By building stylish, compact modular homes in high-density developments, and foregoing inner-city non-essentials such as onsite parking, Pocket Living can recycle its margins into a discount market offering, with at least a 20 percent reduction in price compared to similar developments.
“The average first-time buyer flat today in London costs £350,000,” Marc Vlessing, the company’s CEO and co-founder explains. “If you can render that same flat for £270,000 to £280,000 as an average in the portfolio, you can price approximately 45 percent of young, economically active households into home ownership.”
“Research with the LSE demonstrates that people still want to buy rather than rent,” Vlessing continues. “And in a post-pandemic landscape, young people are “fed up with living with their parents or in HMOs; the circumstances of which are bewildering in terms of size and quality.”
The pair stress that aside from the measurable benefits to mental health from living in your own space, retaining a young pool of talent in London is crucially important politically, commercially, and for the benefit of society as a whole.
“There is increasing recognition of the lifeblood that key workers across the UK play”, says Nick Cuff, chief commercial officer, resounding the thoughts of many on what is hopefully the tail end of the pandemic.
When Pocket Living was formed in 2005, the founders conducted a survey of headteachers, heads of universities, and hospital staff. The results showed that the number one problem with retaining talent was housing related.
“Your average chance of having a state secondary school teacher in the same job for more than two years was almost zero because they left after 18 months, and the number one reason they gave for leaving their jobs was housing,” Vlessing reveals.
Pocket Living believes this is a product of a squeezed middle class. Vlessing explains: “One of the reasons this country has got itself into the housing conundrum we are experiencing, is that for the last fifty years it has thought rigidly around two pools of housing: the open market, and social housing for people requiring housing support. If you only ever talk about these two extremes, the squeezed middle are forgotten and cities atrophy.”
In the midst of the country’s latest housing crisis and with no end in sight to the UK’s deep-rooted culture of desiring home ownership rather than rental options, clearly the need for what Pocket Living does in the market has never been greater. “It makes people very, very happy,” Vlessing observes.
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