Housebuilder Expresses Concern Over Sharp House Price Growth

The CEO of one of the country’s biggest housebuilders has expressed concern over sharp increases in house prices.

Peter Redfern, the CEO of Taylor Wimpey, is heading a Labour-backed review into Britain’s housing crisis.

He believes the Government should consider “tapering off” its Help to Buy scheme, which was formed to help first time buyers get on the property ladder.

“We should not want an environment of rampant house price growth,” he says.

Redfern spoke at the launch of the Redfern Review, commissioned by John Healey, the Shadow Housing Minister, to investigate a decline in homeownership. The amount of young working class households that own their own homes has fallen by a fifth since David Cameron became the Prime Minister.

Data from Halifax shows that annual house price growth has reached 9.7% – Redfern is worried about this rate of inflation.

“If that continues for two, three, four years and beyond, it is an issue. We are now in a borderline place. We have to keep this under watch,” he insists.

Housebuilder Expresses Concern Over Sharp House Price Growth

Housebuilder Expresses Concern Over Sharp House Price Growth

The Redfern Review will determine how to increase homeownership in a “sustainable” way for individuals and the market.

The review is not a policy document for Labour, and Redfern says the party could “choose not to listen to what we say”. He will lead the review panel, alongside Terrie Alafat, the Head of the Chartered Institute of Housing (CIH), Andy Gray, the former Head of Mortgage Lending at Barclays, Ian Mulheirn, the Director of Consulting at Oxford Economics, and Dame Kate Barker, a former member of the Bank of England’s Monetary Policy Committee, who produced her own review ten years ago.

Redfern has denied concerns that his position as CEO of Taylor Wimpey could mean that the role of housebuilders in the housing crisis is not properly analysed.

“Ask me that question at the end,” he says. “I have come into this to ask difficult questions.”

The Guardian claims that Britain’s nine biggest housebuilders hold enough land to build over 600,000 new homes and are sitting on £1 billion of cash.

However, Redfern insists that housebuilders “don’t have a vested interest” to sit on land. He believes the firms are capable of working alongside the Government to solve the housing shortage and there is not a conflict of interest between their shareholders and the country.

He adds: “If you take anything like a medium to long-term view, those conflicts are not significant. We should not want an environment of rampant house price growth. Both sides should want a sensible, regulated, but not over-regulated, market.”

Although he does urge the Government not to set strict targets for the number of new homes that should be build each year. “What really matters is the total or average over the next ten to 15 years,”1 he states.

The spokesperson for housing charity Shelter, Michael Tighe, says the prospect of owning a home in London is a “pipe dream” for young people.

He explains: “Too many Londoners are afraid they’ll never have a permanent place to call home. The next Mayor of London will have real powers on housing – they’ll control the budget for affordable homes, they can submit plans for developments, and make a real difference to millions of Londoners.

“It’s time to see some specific, detailed plans that tell us how we go from what is a very real crisis to a situation where a home of your own in London goes from pipe dream to possibility.”1 

Welcoming the launch of the Redfern Review is Jan Crosby, the Head of Housing at accountancy firm KPMG. She says: “Housing has become an increasing issue across the country in the past few years, with prices marching ever upwards and a shortage of new homes being built.

“Our own research shows that the average first time buyer cannot afford the average first time home, a situation that simply isn’t right.”1

For the latest updates on the property market, head over to LandlordNews.co.uk. 

1 https://www.theguardian.com/money/2016/feb/04/taylor-wimpey-ceo-rise-house-prices

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