McAlpine hits at Brown over house sales
Friday 02 October 1998
Oliver Whitehead, the chief executive, said that the anti-inflationary economic policy of the Chancellor Gordon Brown was knocking consumers' confidence.
He said that in its urge to cool down the economy and prevent a rise in inflation, the Government was scaring off potential home-buyers. Fears of unemployment and dwindling confidence had much more impact on people's decision to buy houses than the level of interest rates or taxes. "It is confidence that is being knocked. Gordon Brown hasn't taken money out of the consumer's pocket," Mr Whitehead said.
Jeffrey Hume, the finance director, said the dampening of consumer confidence was "part of the Government's decision that it does not want a hard landing."
The McAlpine chief executive said that, after a good start to the second half, housing reservations had taken a tumble in the past two weeks. "There is some evidence of a slowdown. In particular, London and the South- east are cooling off".
McAlpine's housing division, boosted by the pounds 42.6m acquisition of the house-builder Raine last year, sold 1,338 units in the first half of the year - a 62 per cent rise on 1997, the company said. The strong showing of the housing unit pushed group profits up 119 per cent to pounds 11.4m. The shares rose 2p to 112p in a sharply lower market.
Mr Whitehead became the latest house-builder to criticise delays in getting approvals for land development. He said the planning system was a "pain in the neck" and contributed to higher land and house prices.
The chief executive repeated that the company was looking at a sale of its US operations, but declined to comment on the time-scale for disposals. Analysts expect the aggregates operator Becker Minerals and the contractor Blythe Construction to be sold separately and to fetch around pounds 70m.
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