Redrow boss makes plea for first time buyers

Aaron Morby 12 years ago
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Redrow chairman Steve Morgan has called on the Government to bring in emergency measures to help first time buyers get on the housing ladder.

He warned that unless the Government came to the aid of first time buyers a full housing market recovery could not take root.

Returning chairman Morgan delivered the plea as he announced Redrow had scraped into the black this year with a pre-tax profit of £700,000.

Morgan, who returned to take direct control after massive losses of £141m in 2009, said the business was now back on track after cutting debts and delivering strong trading profits.

The country’s fifth biggest house builder said planning bureaucracy was also a brake on housing, with Redrow last year spending more money on planning and planning related fees than it did on bricks.

“It has now become the norm that more people are involved in the preparation of the countless reports required to accompany planning applications than are employed on site building the houses,” added Morgan.

He also warned that that sustained market improvements could not be achieved without first time buyers stimulating the chain.

“I am particularly concerned with the plight of first time buyers, who, unless assisted by their parents, are forced into saving upwards of 20% for a deposit, which compares to an historic first time buyer deposit of around 6%.”

Morgan added: “I strongly urge the Government to intervene, possibly by way of an insurance indemnity scheme to enable lenders to provide up to 90-95% mortgages once again to first time buyers, or at the very least, provide a first time buyer tax break.”

He said that  it was a sad reflection on society that the average age of an unassisted first time buyer is now 37 years old.

Morgan warned this would increase to 43 for today’s 21 year olds.

During the year Redrow’s operating profits recovered to £12.7m after a trading loss of £22.4m in the previous year.

Revenues rose 31.5% to £396.9m, due to both a 22% increase in completions to 2,587 homes and an 8.7% increase in average selling price to £149,300 from £137,400 last year.

Morgan said: “The past year has been one of considerable change for Redrow – change that has resulted in a return to profitability.

“We have doubled our build output in response to an improved sales market and embarked on an ambitious land-buying programme.”

He added: “While we remain in a period of tough economic conditions and political uncertainty the work that we have done over the past year means that Redrow is in good shape to continue to make progress.”

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