Steve Morgan CEO of house builder Redrow has dismissed the view that current government mortgage schemes were fuelling the housing boom saying that UK’s “bureaucratic mess” of an “antiquated planning system” was the main cause of the housing shortage.
The government has been criticised by economists and industry players for its launch of the ‘Help to Buy’ scheme in March, the first part of which provides shared equity loans to help people to buy a new home with a deposit of just 5%. “I’ve seen some pretty silly things written in the last week or two and stated by certain politicians,” said chief execultive Steve Morgan recently, careful to avoid naming anyone in particular. “The real issue is not whether Help to Buy is fuelling a new boom, the real issue is that we’re not building enough houses, and we’re not building enough houses because we’ve got an antiquated planning system.”
Steve Morgan, labelled critics of the ‘Help to Buy’ scheme as “hysterical” and said they “should check their facts out”. He said:
“It’s typical of the attitude in this country. When something is successful, the first thing we want to do is kick out. It was designed to stimulate the housing market and it’s done that. Instead of applauding the Government, out come the knockers to knock it. If there’s going to be a bubble it’s going to come from the lack of supply of land because of the planning system.”
Redrow, Britain’s the 7th largest house builder by volume with developments throughout the UK, confirmed last week that pre-tax profits had soared by 63% to £70m compared with last year. Revenues were up 26% as the firm benefited from a 12% increase in prices, taking the average selling price to £212,300. Legal completions were also up 15% on last year with 2,827 homes built. Redrow credited ‘Help to Buy’ with a “significant contribution” to forward sales up 54%.
“We had one site in the north west, we built several hundred houses a few years ago and had 9 conditions, we just had a site on the opposite side of the road recommended for approval with 103 conditions. They just take such a long time to clear these conditions before you can start.”
If the planning system was “antiquated” as Morgan claims then by the very meaning of the word, he has shot down his own argument!