Marc Vlessing’s eyes were first opened to millennials’ struggle to get on to the housing ladder when he was working in theatre.
As CEO of Crescent Entertainment, which went on to become the largest group of theatres and cinemas in the UK, he was surrounded by passionate, hard-working people in their 20s and 30s, “but you could tell they were struggling. They were never going to earn more unless they were that one or two per cent in their sector. There was a real restriction to how much the industry could pay them.”
Vlessing knew how to raise capital, having been a City banker, and he knew how to run a business – showbusiness, even – but he didn’t know very much about housing. So he teamed up with Paul Harbard, a former finance director at housing association Peabody Trust, to make housing for this new, assetless generation of Londoners. “We believe the market need for this type of housing in London is unquenchable,” he says.
Twelve years later and the concept is still a disarmingly simple one. Pocket Living makes compact one bedroom flats, selling at around 20 per cent below market rate, to buyers who meet certain criteria; they had to earn below a certain income, be a first time buyer and live or work in the borough. Homes are bought outright – unlike Shared Ownership where buyers have to buy increasingly larger shares to own 100 per cent of the property – but they have to attain a certificate from Pocket before they sell on to confirm that they’re selling to a buyer who fulfills the same criteria to keep the flats in the same affordable pool.
“When we started, people said that’s bonkers! Who’s going to police this? We will! Why? Because our brand equity is entirely invested in not having a headline in City A.M. saying ‘1,000 Pocket homes are all owned by buy-to-let investors’.”
That scenario wouldn’t just be damaging for Pocket, it would be just as bad for Sadiq Khan who recently handed over £25m to the company in his capacity as Mayor of London to build 1,000 more affordable homes.
But Pocket has won serious capital from the private sector, too. It sold a 50 per cent stake in the company to Related Companies in February 2016, a New York-based real estate firm headed up by US billionaire Stephen Ross.
A self-described disruptor, Vlessing says Pocket was conceived as a public-private partnership from day one. “Here I am as a private company and I’ve taken on the regulatory function of a public sector organisation. The public sector, the GLA, has just doubled its investment in Pocket and it’s had to become a venture capitalist. How’s that for a mindfuck?... I don’t think you can just rely on the market to respond to need.”
I bought my first home here when I was 24 because that’s what an immigrant does. If they can, that is their bit of bedrock in society.
When it comes to deciding where to build, Vlessing says he’s always looking for “pre-gentrified, fringey places” like Cricklewood and Croydon – but they have to pass a simple test. “Would I want my daughter to live there? And actually it brings out all sorts of emotional complexity and if we think the answer is no, we don’t buy the land.”
His crack design team specialise in utilising space, so much so that its one bedroom apartments are about 418sqft on average. These are specifically aimed at a new generation whose Spotify and Kindle accounts render shelf space redundant.
However, Vlessing denies he’s making “micro-flats”, which he says are smaller than London’s minimum space standard for new builds, while Pocket meets those standards. “I’m not hugely in favour of [micro-homes]. I think civil society should have minimum standards because I worry that people lazily assume that these homes are staging posts. What we’re seeing is people living in these homes for much longer than we thought.”
And it’s this demographic that Vlessing has in mind for his next venture, Pocket Edition. These larger, yet still compact, two and three bedroom flats are aimed at small families on a budget looking for a minimal service charge, but crucially, they don’t have to meet eligibility criteria to buy.
A smooth talker, with an intellectual manner and a cut-glass English accent, it’s easy to assume Vlessing is to-the-manor-born. In fact, he’s a Dutchman who lived in England until he was 8 and returned for university when he was 18. “I don’t talk about it very much, but I am, of course, an immigrant,” he says. “And I think that’s partly why I set up Pocket Living. I bought my first home here when I was 24 because that’s what an immigrant does. If they can, that is their bit of bedrock in society.
“This is a capital city of immigrants. To my mind, London always needs to be a place that attracts people who believe they can improve their fortunes or career here.
“To get a foothold in the capital is an immigrant dream, and I don’t think it’s surprising that Pocket comes out that.”