For a man who runs a real estate business, Stephen Kenny has an unusual attitude to property proprietorship. He says: “I don’t like owning property. I find it a burden. When things go wrong with the boiler or the roof, it’s my problem.”
The chief executive of the Property Investment Market prefers to rent, praising the advantages of living as a tenant. “It makes my life a lot easier, it’s more flexible and I can move more easily. I may want to invest in property but I don’t want to own the damn stuff.”
Kenny has had a colourful career, working as a photographer, Ministry of Defence computer programmer and a consultant specialising in establishing internet-based exchanges, including Stocknet and OneSea/SeaSupplier.
With the popular media awash with advice on where and how to live, what to pay and where to invest, Kenny says he recognised a special opportunity in the market.
“Looking at television, radio and newspapers, people clearly want to invest in property but very few actually do and, if they do, they tend to invest near where they live.”
The Property Investment Market seeks to subvert this trend by allowing people to buy a stake in property they need never even visit. It neatly distinguishes between owning and investing in property by allowing online investors, known as members, to enter the buy-to-let market and buy a share in a residential or commercial property without having to take out a mortgage.
The idea first came to Kenny in 1996 while he was working on a consultancy to fix an exchange in Italy. He was so drawn to the location, just outside Milan, that he decided he wanted to invest there. “I was looking out of the window on a snowy night and thought I would like to live there. If I could not live there, I would want to invest there.”
In the late 1990s, Kenny saw the potential for the nascent internet to act as a vehicle for allowing the public to get involved in property investment. Kenny had the experience and technical knowledge to set up a property exchange but says other work responsibilities and suspicion about internet safety prevented the seed of his idea from fruition.
“The financial transaction part pushed me back. People had to be comfortable about making transactions over the internet. It was only in about 2002 that the media and the public started to trust it.”
Since launch late last year, the Property Investment Exchange has collected nearly 50 properties and more than 600 investors. No member can invest more than 10 per cent in any property and the premises, both commercial and residential, are sourced through developers, brokers and syndicates which choose to list on the exchange. A plc is created, perhaps controlling a number of holdings, and investors buy shares in the plc.
The exchange targets a wide pool of investors, from those who cannot afford to invest in a single property to those who want a wide portfolio of investments in multiple locations. Kenny says: “Even if you can afford your own property, you can spread your capital. You might want to invest in houses for London commuters or flats rented by students.” Kenny is keen to stress another advantage of investing in property this way – the ability to invest in residential property through a pension. The investment is listed so investors are not bound by the restrictions on direct investments in residential property. The exchange’s Sipp-linked account allows members to invest in property while benefiting from tax relief.
Kenny says: “With Gordon Brown’s U-turn, the rules are quite tight as to how you can have residential property in your Sipp but we fit in extremely neatly.”
He claims that the exchange clarifies, simplifies and empowers ordinary users. “Where you introduce a well managed exchange, buying becomes far simpler and more comfortable. With the liquidity of the investment, I can stop or start and choose high risk or low risk. You can compare a wide variety of properties on it with a high level of confidence. It makes things simple and more transparent.”
Kenny has ambitious plans for the Property Investment Market. “My ambition is to take the exchange globally. In the not too distant future, we will have 500 to 1,000 properties in the UK and abroad. In 10 years, there will be tens of thousands of properties on the exchange.”
With many commentators talking about a slowing or even a dip in property prices, there are concerns that liquidity could be an issue if investor confidence turns against residential property but Kenny is bullish on this point.
“Our investors only have to invest where they are comfortable and not more than they want to, so it is far less likely they will have to sell. Short-term fluctuations will affect short-term speculators on the exchange, people who want to buy and sell in days and weeks.
“Property is a tremendous holder of value. It has been the most reliable market over the last 50 to 70 years. Over the long term, property investment is the best long-term investment.”
Born: Bloomsbury, London, 1962
Lives: Wandsworth, London
Education: King’s School, Canterbury; Salford University
Career: 2006-present – chief executive, The Property Investment Market; 1990-2006 – various roles including consultant to Bonus Card, Scottish Widows, Stocknet, Betfair, Interest Exchange, MindShare; 1987-90 – business analyst, Sema Group; 1986-87 – programmer, Ministry of Defence; 1985-86 – programmer, BT; 1984-85 – appointment maker, Life sales; 1983-84 – photographer
Likes: Photography, cycling from Lake Constance to Vienna
Drives: Toyota Aventis
Film: Kenneth Branagh’s Henry V
Album: Crisis? What Crisis? by Supertramp
Career ambition: To take the Property Investment Market to a global level
Life ambition: To live by the sea
If I wasn’t doing this I would be … A writer of illustrated books