13 minute read
45 YEARS LATER
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years… and counting45
As KFH celebrates its 45th anniversary in business, founder and managing director Lee Watts discusses what it takes to build such a successful property empire
The Ford Fiesta went on sale, Star Wars hit cinemas and a pint of milk cost just 11 pence.* The year was 1977 and, as everyone took to the streets to celebrate the Queen’s Silver Jubilee and later mourned the death of ‘The King of Rock ‘n’ Roll’ Elvis Presley, the average London house price was just £13,180.
It was also the year that Lee Watts, then a fresh-faced 22-year-old, started a property management business in Brixton with friend and business associate, Philip King.
The next step
So, in the year dominated by the miners’ strike and the fi rst time we ever heard Band Aid’s Do They Know It’s Christmas?, the company expanded into residential sales, opening their fi rst o ce in West Putney. Kinleigh Folkard & Hayward, or KFH as it is now known, has since grown into a network of over 60 branches with
Fresh-faced approach
“That’s where the name Kinleigh came from, a combination of my name and Philip King, who joined me at the beginning,” explains Lee, who made just £138 profi t in his fi rst year of trading. “I was 22, but looked about 16. Phil was eight or nine years older than me and fi rst impressions count when you’re in business, so I needed somebody else to walk in the door fi rst.”
Having previously worked for a housing association, Lee had seen a gap in the market to manage blocks of co-ownership fl ats – similar to today’s shared ownership schemes. “It was a form of housing created by the government back in the early 1960s, which enabled tenants to build up a deposit for the purchase of their fi rst property,” explains Lee. “We started with 95 units across four blocks in Putney, Watford, Brentwood and Finchley – all small blocks dotted on the four compass points of London.”
Little did he know at the time, but the property market was about to change dramatically.
When Margaret Thatcher became Prime Minister in 1979, she brought with her a raft of radical changes including The Housing Act of 1980, which gave council house tenants in England and Wales the ‘Right to Buy’ their house from their local authority with huge discounts on the market value. Co-ownership properties were also included in the Act.
“There were quite stringent rules and an awful lot of hoops for people to go through, so we combined with a fi rm of solicitors to provide a nationwide service for tenants living in coownership schemes to purchase their properties. For most people it was a win-win situation. We were selling properties with an average value of £100,000 for a third of their value,” says Lee.
Kinleigh specialised in co-ownership management at that time and now moved into the management of private residential developments.
900 employees off ering specialist and impartial support across a wide range of property services.
But, Lee admits, he was somewhat ‘fl ying by the seat of his pants’ when he opened that fi rst estate agency branch back in 1984. “I’d worked with a chap at the housing association, who had gone off to work in estate agency, and I got him to come in to run the fi rst one because I hadn’t got a clue,” he says. “But what I did know was that we wanted to be a bit diff erent – we wanted to look diff erent. We actually drove all over London for about two days until I found a shop in the colour that I wanted. I suppose I could have just gone and got a paint card, but I wanted to see what it would look like as a shop front.”
While the colour, a burgundy as Lee recalls, wasn’t quite the same as is seen on KFH’s branding today, it marked the start of the company’s journey to what has now become known as the ‘red estate agency’.
Lee also decided to build a time capsule into the wall of that fi rst branch, which remains there to this day – although Lee struggles to remember what was put in it. “I’m not sure if or when we’ll open it, perhaps in another 45 years, although I’m not sure I’ll still be here then,” he chuckles.
It turned out the early 1980s were a fortuitous time to start out in residential sales. Average house prices more than doubled from £25,000 at the start of the decade to £55,000 by the end of it, during which time the company also expanded into lettings, opening its fi rst lettings branch in Barnes, in 1987. “The property market was in a good position then. It had been in the doldrums, but it was a very buoyant market and, in fact, there was a real housing boom during the following couple of years,” says Lee.
The rollercoaster years
The company has navigated a whole host of markets since, the recent coronavirus pandemic being one of the hardest.
“It was probably the fi rst time that I’d ever wished I’d had a boss,” Lee admits. “It was tough when you didn’t know how long that lockdown was going to last for and there was a point where you would think that if it went on much longer, you wouldn’t have been able to continue. But, of course, we were in the same boat as everyone else.”
While KFH had to navigate the pandemic the same as every other business, the company managed to retain all its staff , paying them full salaries even when on furlough, with senior leadership making salary sacrifi ces to provide for others. “We probably could have made more money by doing things a little diff erently, but that was the right thing to do,” says Lee. “We managed things properly and I think our staff really appreciated that.”
Despite the di culties businesses have faced over the past couple of years, Lee says the most challenging time in KFH’s 45year history was in fact the 1990s when the property market took a nose dive following the dissolution of MIRAS (Mortgage Interest Relief At Source) arrangements in 1989.
“There was a massive rush to buy property so we had an incredible year, but then the market literally fell off a cliff ,” he remembers. “The nineties were a real hand-to-mouth time. It was a matter of grow, grow, grow or disappear.”
And grow they did. Thanks to a partnership with and the fi nancial support of Winterthur Life, the company acquired a number of estate agencies out of receivership, the fi rst of which was Folkard & Hayward in 1992. The nineties saw the company create fi nancial services, commercial, chartered surveyors, and land and new homes divisions, as well as opening 25 new branches. But while the
company was growing at an exponential rate, the debt pile was also building. rate, the debt pile was also building.
“I had the bank threatening to close me down at one point but we got through it,” says Lee. “We basically expanded out of the recession and then, when we got into the early 2000s, the market turned for the better.”
A new century
The early noughties brought about renewed vigour within the economy. The Millennium had come and gone with far less disruption than what had been predicted and the property market was once again on the up. At the half way point of the decade, average property prices nationally had risen to £155,000 and a whopping £270,000 in London.
By 2007, Kinleigh Folkard & Hayward (as it was now named) had established a new head o ce in Wimbledon and, a year later, was identifi ed by the Sunday Times as one of the fastest growing companies in the UK.
Even the fi nancial crisis of 2007 did little to dampen its achievements and KFH continued to grow steadily for the next decade, opening a corporate services department in 2014 and more recently, in 2021, entering a fi veyear partnership with Simple Life London that will see it let and manage over 3,000 new build-to-rent homes in the Capital.
So, what then is the secret to the company’s success? It perhaps helps that London has sat top of the country when it comes to property price performance over the last 45 years. Even after adjusting for infl ation, London house prices have increased by a huge 13.5% per year on average. But that still doesn’t explain why KFH sells more homes across London than any other agency brand.
“I think it’s because we are – and have been since day one – service led,” says Lee. “When I started the business, it was all about property management and servicing each and every one of the fl ats in a block – if one wasn’t happy, I wasn’t doing my job properly and that ethos has carried right through the business.”
Indeed service, communication and results are the three pillars of the company – that and the culture of the business, which Lee explains sets it apart from other industry leaders.
“I like to think we’re a very social company, because we want to be, not because we’re told we should be,” he adds. “I’m a great believer
years of KFH
A whistlestop tour of the company's key dates
1977
Lee Watts (and Philip King) establish Kinleigh, a property management company based in Brixton
1984
The company expands into residential sales and opens its fi rst branch in West Putney. They now have 60+
1987
The company expands further by introducing residential lettings when they open a branch in Barnes
1990
A fi nancial services division is created in partnership with Winterthur Life. A commercial division is also introduced
1992
Folkard & Hayward is acquired with o ces both north and south of the river. New divisions swiftly follow
that you need to enjoy what you do. When you employ 900 people, that’s not necessarily going to apply to everybody, but as the company has grown, I’ve employed what I like to think of as fairly like-minded people.
“I’ve always had a ‘pint of Guinness’ interview process,” he adds with a smile. “I’ll have a pint on my side of the table and if the person on the other side has still got my attention by the time I’ve finished that pint, they’ve probably got a good chance of getting the job because they will have a personality that engages me. We can always train someone to do a job, but we can’t train them to have a personality so that’s really key for me. And it runs through the company.”
It’s a philosophy that is not only reflected in the relationships KFH employees build with their clients – “I’m sure our clients would be quite happy to have our agents around the dinner table and I’m sure some of them do,” Lee says – but has led to brilliant levels of staff retention. Three in four of management staff have been with the company for more than nine years.
Staff rewards and incentives, such as the annual awards party and trip to Verbier, have become part of the company’s DNA, while providing Lee with some of his most memorable moments, although he will not be drawn on exactly what those are. “Well I learnt to ski,” he says. “That I couldn’t do before my first trip to Verbier!”
Period of reflection
So, what would Lee say is the biggest change he’s seen over the past 45 years in property? “Transactions were a lot higher than they are now – people were moving far more frequently back then,” he says. “If you go back to 2007, there were over 90,000 sales transactions in London, but in 2019 it was around 37,000. So that’s a pretty big change and it’s been coming down every year since 2015/16. On the other side of the coin, the increase in investment rental property in London has grown exponentially.”
Like all 21st century businesses, KFH embraces technology, but despite this Lee insists his lettings and sales negotiators use good oldfashioned pen and paper when registering any new client with the business. “Some of them hate me for it,” he jokes. “But I think it’s an important part of that first communication. If you’re trying to fill in a form on a computer you’re focusing on the screen, scrolling up and down and you lose that interaction with the customer.
“I’m not sure how much longer I’ll be able to hold onto that discipline, but it’s something that I feel is important to the business, to our brand. And, we sell more property than anybody else in London so if it ain’t broke, why try and fix it?!”
*Reference: Land registry, landregistry.data.gov.uk
1995
Ten Cornerstone branches are acquired in London and several new cold starts opened across London
1998
Keith Cardale Groves in central London and Leven in north west Kent are acquired, adding a further 12 branches
1999
The company rebrands to Kinleigh Folkard & Hayward and a chartered surveyors division is launched
2002
Muswell Hill is the first KFH branch to hit £1 million as the property market in London really starts booming
2007
KFH House, a new head office, opens in Wimbledon, which remains central to the operations to this day
2017
London Youth charity partnership is formed. In the years since, they have managed to raise over £320,000
2021
Simple Life London partnership to let and manage over 3,000 buildto-rent homes is announced
