Rising revenues and climbing profits have become par for the course for British house-builders this summer. Redrow was the latest to post a bullish update yesterday, boosted by the coalition’s controversial Help-to-Buy programme which effectively uses taxpayer cash to prop up cash-poor house-hunters.
But despite this gift to construction firms’ bottom lines, the government is not in Redrow’s good books. Chairman Steve Morgan used yesterday’s results to get a few things off his chest about Britain’s antiquated planning system. “We have a population increasing at the fastest rate ever and the third-slowest rate of building in the western world,” Morgan moaned.
And he has a point. The recent “boom” in house-building is still exceptionally modest compared to other countries and past decades.
Construction began on fewer than 160,000 new UK properties in 2013-14, compared with an average of more than 300,000 for much of the 1970s. France’s house-building “crash” is still seeing more than 275,000 new houses built per year.
British housebuilders are enjoying an undeniably strong run right now, yet the sector’s gains will hit a ceiling unless planning is seriously liberalised. On that note, don’t hold your breath.