House building scheme no use, says Morgan
Steve Morgan, the chairman of housebuilder Redrow, this morning launched an attack on the UK government’s New Homes Bonus scheme, saying it was unlikely to prompt councils to approve more homes.
He said: “We are increasingly being met by a reduction in planned numbers for new homes and grossly unrealistic expectations of what we are expected to deliver in the way of planning gain.”
Despite this, Flintshire-based Redrow made a £8.5m pre-tax profit in the six months to December, compared to a £8.7m loss in the same period a year earlier, on revenues which grew to £216.1m from £187.2m.
Morgan said many local councils were using the UK coalition’s localism policy “as an excuse to substantially reduce housing numbers and slow down the planning process even further".
But he said Redrow itself was performing well, with reservations during the first six weeks comfortably ahead of the same period last year – although that could include customers catching up after the winter freeze.
Morgan said he disagreed with predictions of a house price fall this year: “Looking ahead, house prices have been stable for some considerable time now and we do not share the pessimism of some commentators that there will be a major fall in house prices during the coming year.”
Redrow put part of its improved performance down to its New Heritage Collection of mid-market homes, which it said achieved an average selling price of £196,000, around 7 per cent higher than equivalent size homes in the previous Signature range. The company’s total average private selling price per house rose by 16 per cent to £170,500.
Net debt stood at £51.5m at the end of December, compared to £49.3m a year earlier.
Morgan said: “Redrow has been transformed over the last two years. The New Heritage Collection is proving to be an aspirational product for our customers and it has undoubtedly played a major part in repositioning the Redrow brand and lifting the group’s margins.
“Given the improved quality of our land bank, the roll out of the New Heritage Collection and the unquestionable housing shortage, I feel that Redrow is in good shape to continue to make progress.”
