Entrepreneurs: How London's housing crisis is helping busy pair match sharers up with digsComments Off on Entrepreneurs: How London's housing crisis is helping busy pair match sharers up with digs
How London’s housing crisis is helping busy pair match sharers up with digs
An idea, a phone, a newspaper and some charm. Those were the key ingredients in the creation of London Shared, a company that founders Jake Willis and Kim Felettigh say has professionalised shared accommodation — a portion of the capital’s property market that was once akin to the Wild West.
The idea of serving as a middle man in the rental market — guaranteeing income for landlords and well-managed, quality housing for tenants —came when the Kiwi and Aussie duo, who first met while working for Foxtons in London, bumped into each other in Thailand in 2006.
Felettigh, on a backpacking trip, and Willis, spending a six-month sabbatical at a Muay Thai boxing camp, refined the concept on a Phuket beach. They would lease a property from a landlord on a three- to five-year agreement, do it up and then rent it out room by room to working professionals, earning the difference between what they paid the landlord and what the tenants paid them.
Such was their faith in the project that they booked one-way tickets to London, immediately wrote a 30-page business plan and took legal advice. Ignoring one or two doubters, they then raised £20,000 from family and friends, a process that proved trickier than a later pitch to their bank. “We wanted it to be based on the concept rather than who we were,” says Willis.
Then they began scouring classifieds bible Loot magazine and hit the phones in a search for landlords with suitable properties — two- to five-bed ones close to transport links and in safe surroundings. Loot also found them their first major investment, a £500 scooter with a dodgy fuel gauge to make travelling to appointments quicker. “We had to pull over every now and then, take the petrol cap off and shake it to check the fuel,” they recall.
Launching in 2007 as recession hit wasn’t ideal, but more people downsizing and Londoners increasingly turning to the cheaper option of sharing meant they still had a chance. Then came the charm. First deployed on the friends providing couches for them to crash on, it was soon unleashed on landlords. “We would turn up, talk and say ‘We won’t let you down’. With one of our first landlords, Steve, we sat at his kitchen table and drank a beer and he decided to give us a chance. He introduced us to James, who then introduced us to his brother, Chris. Once we get a landlord they stay with us.”
The early adopters’ faith has since been rewarded. London Shared estimates it can save a typical landlord £30,000 in fees over the course of their agreements, and they have always been able to pay the monthly rent.
Phil Spencer, presenter of TV property programme Location, Location, Location, endorsed the firm after Willis spotted him in the street and persuaded him to check out a nearby London Shared property. “If you’re a landlord, London Shared’s approach is something you’ll want to consider,” he promises on the company’s website.Tenants appear satisfied too: the average stay in one of their flats has gone up from nine to 12 months, with some staying as long as five years.
Now in its ninth year, London Shared manages £100 million of property in west and south-west London and has dealt with 3000 tenants, all vetted and matched with like-minded individuals. It has shunned angel investment in favour of bank loans and retaining control.
Along the way, the company has recruited a team of 12 — and two mascots, Willis and Felettigh’s dogs Mango and Kona, who roam around their airy, open-plan Parsons Green office, not far from Willis’ former employer, the White Horse pub. The end of the working week is capped off by Fun Friday when the team gets together for a wine-tasting run by general manager and former sommelier Andrew Culph. In summer, the company funds Fitness In The Park sessions.
Their biggest problem remains locating landlords although they have recently found growing interest from owners of family-sized homes and workers being sent overseas. The capital’s housing crunch continues to provide a stream of prospective tenants. Next up are expansion across London, with the south-east and the north the top priorities, and a plan to attract portfolio landlords, who stand to save “hundreds and thousands”.
They may eventually launch overseas. Felettigh’s former home, Sydney, would be a “no brainer” but New York and cities in Canada and Asia could also work. “Anywhere there is a housing shortage, there is an opportunity,” they say.
It looks as if nowhere is safe from this charm offensive.