The chairman of one of the UK's top housebuilders, Redrow, has rejected accusations of land hoarding by the industry and called the government's housing White Paper "disappointing".
Steve Morgan said the planning system was the biggest barrier to new houses.The suggestion that housebuilders were sitting on landbanks in order to maximise profits was "completely incorrect", he told Radio 4's Today. Mr Morgan was speaking after Redrow revealed strong half-year results.
The company reported that completed house sales were up 13% in the six months to December 2016 to 2,459 compared with the same period last year and pre-tax profits were up 35% to £140m.
Redrow and other big builders have enjoyed big growth in profits for the last three years, but Mr Morgan said the industry was rebuilding its profitability after suffering heavy losses in the financial crisis. "Profits are growing, but this is a return to normal levels from a nil start," he said.
'Wall of bureaucracy' The planning problem stemmed from difficulties in moving from outline permission - where a council says land is OK for housing - to detailed permission, when the builder can start work. "This can take normally one year, but up to two years," Mr Morgan said.
Redrow has just short of 26,000 plots in its landbank. "At one-third of them, we just can't get on site."
The planning process was also inhibiting supply by dissuading smaller builders from doing more. "It's not so bad for the big builders like us, but small companies face a wall of bureaucracy. If I was starting out today, I could not build up Redrow as I did."
The housing White Paper proposed forcing housebuilders to surrender land if construction had not started two years after planning permission was granted. The current rule is three years. Mr Morgan said that if the time was counted from the grant of outline permission, it would make many projects "impossible". He said references in the White Paper to a "broken" market were "a bit disappointing" and added: "Actually, a lot has been done to increase output in the last few years, but of course, there is more to be done."