CityAM Awards 2015 Business Personality of the Year winner Tony Pidgley, the co-founder of the Berkeley Group has a true rags-to-riches tale
When it comes to determining the key to his success in life, Tony Pidgley puts it down to a good dose of common sense, a splash of luck and the life lesson his first lorry taught him when he was 15 and the engine blew up. His main means of earning his keep – transporting everything from building materials to manure – went kaput.
“Everybody thought it was a disaster. But we got stuck in and stripped the engine down and rebuilt it and went back to work. What’s important in life is you move forward and deal with the challenges as and when they come. There is always an answer,” he says, in his broad East End accent.
The founder of one of the UK’s largest housebuilders, Berkeley Group, and winner of this year’s CityAM Business Personality of the Year Award is something of an optimist and not afraid of a challenge or two. “I love them. It would boring if I came to work and there was nothing to put right, wouldn’t it?”
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Berkeley has certainly had its fair share of challenges to overcome over the course of the past 30 years as a public company, namely three downturns and two failed takeover bids – one with Terra Firma’s Guy Hands and another by Pidgley’s own son.
Now with the country suffering an acute housing crisis, the industry is arguably facing its biggest challenge yet, with pressure on Berkeley and its fellow housebuilders to “put right” the issue. However, you could forgive Pidgley for being a little bored in 2015 after what has been a year of outperformance for the group.
The London-focused housebuilder, whose schemes include the 50-storey One Blackfriars Tower on the South Bank and its Riverlight project in Nine Elms, sold 3,355 homes across the south east in the year to 30 June, with 16,921 homes built over the past five years. This includes more than 6,000 affordable homes and 10.9 per cent of all new affordable homes in London.
The company also entered the elite ranks of the FTSE 100 this year for the first time after annual profits surged by 42 per cent to £539.7m, earning Pidgley a £23.3m payout. Not bad for a builder who started with one lorry and a dodgy engine.
LUCKY BREAK
Adopted from Barnardo’s at the age of four by travellers and brought up in a disused railway carriage, Pidgley’s life is an impressive tale of rags to riches. He left home and school at the age of 15 barely able to read and write but already well-versed in the essential rules of business.
“On Sunday, my mum would count the family wealth and if we were not a little richer, it meant a little less came off the table. That’s just old-fashioned principles. I had good grounding in business and common sense They were dealing with people and that’s where it comes from,” he says.
With school behind him and barely a penny to his name, Pidgley started out by knocking on doors and taking odd jobs, from polishing cars to cleaning windows. “I pretended I could landscape even though I only know two variety of shrubs – the azalea and rhododendron. But the great lesson in life is that if you are prepared to work hard, you can do well and to some extent I am the living proof of it.”
Pidgley says “everyone needs to make a little bit of luck in their life”. His came at the age of 19 when, after years of saving up and building a fleet of 40 lorries, Crest Nicholson snapped up his haulage business and weeks later appointed him to the board. There he met the late Jim Farrer, one of Crest’s directors with whom he would go on to found Berkeley Group seven years later, floating it in 1985.
Pidgley said being 19 and on the board of a public company gave him “a whole different view” of the world than what his peers could see. His view, however, clashed with that of Crest’s then-chairman, and his stay at the firm ended abruptly, with Pidgley being sacked and Farrer resigning in sympathy. “I didn’t call being sacked a lucky break at the time,” he jokes. “Jim and I, we went to lunch and thought what are we going to do? So we said let’s start our own. And that is just how Berkeley was formed.”
BERKELEY PRESENT
Over the past 30 years, Berkeley has succeeded in delivering high-quality upmarket homes across the capital, escaping relatively unscathed from three major market downturns thanks to Pidgley’s canny ability of being able to call the market. This knack has earned him almost mythical status, yet Pidgley – again – calls it pure common sense. “You can tell when markets are crashing. The [1992] crisis where we went to 12 per cent interest rates, you didn’t need a degree to call that – people couldn’t afford to pay their mortgages.” With prices at record highs again now, several banking analysts have warned that the UK housing market is dangerously close to bubble territory.
But Pidgley is not calling the top of the market just yet. “We still have too much of a housing shortage. I think we have gone back to a normal housing market, is my call. It’s steady and that’s not a bad thing because it means it’s good value for the buying public. We [housebuilders] have to work to sell, but we are not seeing any recession around the corner.”
He warned that George Osborne’s stamp duty reforms had dampened demand at the top end of the market, saying it could have a detrimental impact in the long term on “ordinary hard working English families”. “Because most homes in London are over £1m, that stamp duty is a hell of a burden when most people use that property as their home and they generally use that as their savings towards their retirement,” he said.
Pidgley supports other Conservative plans to boost the housing market, but believes that the key to resolving the housing crisis is freeing up more land, even if it means unlocking greenbelt land. “It is a hell of a debate. But I think we have got to look at the housing crisis and what we have to accept is that in 1947 we put a green line around land and sometimes that engulfed scrapyards or industrial land which is not beneficial to the green belt and those sites should be released.”
“I don’t think any of us particularly want to attack a beautiful green field… We are all romantics. But I think when it is not adding anything to the community or public life because it’s in industrial use or contaminated, then it should be released for housing.”
“We need that land so we get those homes. And we need to address the affordability for our young people, our professionals and our key workers. It’s important to any country and it’s particular important for London, which is probably the most diverse financial capital of the world. We are the financial hub and we must cater for our key workers. It’s important the government of the day addresses the issue.”
Last on his wishlist is the need to address the skills shortage, which he warned is threatening the building industry and could undermine the government’s house building targets. With the UK economy dominated by service sector jobs, Pidgley believes the industry should do more to champion construction as a career – his own path to success is clearly a strong example.
“Our industry has got to say that it’s great to work in construction. You create something, you make a place, you build a home, and you can see it go up. It doesn’t have to be all IT based. We are all different at the end of the day.”
He suggests that there is still a certain taboo around being good at “working with your hands” as opposed to being talented academically. “Some people are highly intelligent, some people have a lot of common sense and work with their hands like I could. That’s not a crime. I have never been ashamed of that. I struggled to read and write. But I could still do things and create things and we should encourage young people to do that. The point I want to get across is that if you have got the passion, and the belief, the energy and the willpower there is nothing wrong with common sense and being proud of having a trade and doing it well.”
It’s because of this we have awarded him Business Personality of the Year.