Before launching a review into the housing crisis in the UK, Taylor Wimpey CEO Peter Redfern has warned that he is already concerned about the speed at which house prises are going up.
The Refern review, which is backed by the Labour Party, will be the fourth of its kind, following the Barker review in 2004, the Calcutt review in 2007, and the Lyons review in 2014.
These reviews have all focused on the supply of homes available, and the rate at which homes would have to be built in order to meet government targets and to prevent prices from spiralling out of control.
Warnings were clear right from the offset when the 2004 Barker review found than in the 30 years up to its instigation, house prices in the UK had gone up at twice the average rate for the rest of the EU. The report also found that over the course of less than 20 years, the proportion of English households who were able to afford a home had fallen from 46% to 37%.
The 2007 Calcutt review found that while the housing industry would have needed to grow by some 4.75% in order to meet the required demand on supply, this growth was plausible, although the industry was “answerable only to its investors and shareholders and not to the public interest”. Government intervention, in the form of incentive frameworks encouraging building, would be necessary.
Unfortunately, shortly after this review, the credit crunch hit and house building slowed right, with around 70,000 fewer homes built in 2010 than in 2007.
The next review in 2014, headed by former BBC chairman Sir Michael Lyons found that in order to keep up with growing demand, houses would need to be built at a rate of 243,000 per year.
Redfern ‘s review will assess the same issues, and will examine at this early stage how current Conservative policy is promoting the increased development required to match up with growing demand for homes.
Following figures release by the Halifax that showed house price inflation at 9.7% for the past year, Redfern commented that while we are currently “in a borderline place,” if such inflation “continues for two, three, four years and beyond, it is an issue”, adding that “we have to keep this under watch.”
Questions have been raised about Redfern ‘s eligibility to conduct this review in a wholly unbiased manner, given his position as CEO of one of the country ‘s largest homebuilding companies. A report from the Guardian at the end of last year revealed that Taylor Wimpey were, at the time, sitting on at least 180,00 unused plots of land. Redfern roundly denied any such allegations.
He maintained that he and other homebuilders did not have any vested interest in sitting on land. He said, contrary to Calcutts claims back in 2007, that there is no “significant” conflict between his and other similar company ‘s obligations towards their shareholders and towards the country as a whole.
Redfern maintained that, as developers, “we should not want an environment of rampant house price growth” and that both shareholders and the general public “should want a sensible, regulated but not over-regulated, market.”
All eyes will be on the results of Redfern ‘s review into what is considered one of the most important domestic issues at the moment.