Housebuilder warns of new housing crisis
Published: 16 February, 2010
EWLOE: Steve Morgan, executive chairman of housebuilder, Redrow called on the Government to address the shortage of homes in the country or face the prospect of social unrest.
"There is massive pent up demand for home ownership in this country and something has to be done to solve the housing crisis or it could lead to social unrest," he said.
Mr Morgan, who founded Redrow in 1974 and returned to run it in March last year following a boardroom coup, said that the Government needed to help ease the land market, because landowners are not selling.
"Vendors perceive land to be cheap at the moment, so they won't sell. The government needs to release some of its holdings or encourage the banks to sell some of the land they have taken on, otherwise things will get very difficult," Mr Morgan said.
Housebuilding has been one of the worst affected industries during the downturn, with falling consumer confidence causing property sales to tumble.
Mr Morgan said that mortgage availability was a significant hurdle for any sustained and meaningful recovery in market.
Since the middle of 2007 banks' appetite to lend on property purchases has declined and during the first 11 months of last year just £48bn was lent to 456,000 prospective home owners, according to the Council of Mortgage Lenders. In 2006, £157.8bn was lent to 1.1m homeowners.
In spite of the average cost of mortgage interest payments falling to a 13-year low at the end of 2009, the median size of deposits required for borrowers has risen over the past two years to 28%
Mr Morgan said that although the lending had been "out of control" before the downturn, he would welcome the return of 90-95% mortgages.