Redrow chairman criticises 'mortgage famine'

The boss of one of Britain's biggest housebuilders today hit out at regulators for creating a mortgage famine and risking the economic recovery.









Requirements that banks should be forced to hold on to more of their money and proposals for new rules on mortgage lending are stifling the housing market, said Steve Morgan, the founder of Britain's fifth biggest homebuilder Redrow.



"Our message to the Government is simple: the regulators are going too far and the medicine risks killing the patient," he said. "A generation of young people are being denied the opportunity to buy a home and that's not fair."



Mr Morgan claimed that a "mortgage famine" had been created in the UK because lenders were subject to new international rules that banks should be forced to hold on to their cash, and part-nationalised lenders were preparing to repay loans to the Government.



As a result, mortgage lenders were increasingly risk averse and were insisting on deposits of 25% or more, an unrealistic amount of money to expect most first-time buyers to stump up.



The situation could be made worse under the FSA's proposed tightening of the rules that would impose tougher affordability tests and limit interest-only mortgages.



"Every week we are forced to turn away potential purchasers simply because they do not have a deposit of 25% or more - people with excellent jobs who under normal circumstances would easily qualify for a mortgage," said Mr Morgan, who also owns Wolverhampton Wanderers Football Club.



"The case for resolving the mortgage crisis is compelling as we cannot have a buoyant UK economy without a healthy housing market."



The number of mortgages available to buyers with deposits of 10% or less has fallen from 1,244 to 33 in the last three years, he claimed.



He called for lenders to return to asking for deposits of 5%, which he claimed would stimulate demand for new homes, create some 600,000 new jobs and deliver further taxes to the Government.



The chairman of the Flintshire based company accused the Government of deliberately suppressing the housing market, which was "laying the foundation for the next boom/bust cycle".



The Government should offer financial guarantees to lenders to encourage them to offer mortgages at more favourable rates of interest to people with small deposits, he said.



His comments come as new figures released today from the Halifax show that the average price of a home rose by 1.8% in October but the number of transactions were at half their normal level.



But Mr Morgan said house prices had actually been very stable over the past year and that fluctuations indicated by surveys were caused because of the small number of transactions.



Despite the mortgage drought, Redrow's turnaround continued, as a result of building more expensive family homes Mr Morgan, told the company's AGM in Flintshire today.



Sales of homes in the 18 weeks to the end of October were up 9% year-on-year to £133 million.



The average price of homes sold by Redrow was up 16% from a year ago to £174,000.



Redrow currently owns enough land to build 13,000 plots, which will secure its supply of new homes for the next five years.



It made pre-tax profits of £700,000 in the year ending June 2010 - its first profit for three years. It had made a loss of £44.2 million in the previous year.

News
people
Sport
Yaya Sanogo celebrates scoring the opening goal with Arsenal's English midfielder Alex Oxlade-Chamberlain
champions leagueLive: All the latest from the Emirates and Bulgaria, where Liverpool face Ludogorets
News
Andy Murray with his girlfriend of nine years, Kim Sears who he has got engaged to
peopleWimbledon champion announces engagement to girlfriend Kim Sears
Arts and Entertainment
An unseen image of Kurt Cobain at home featured in the film 'Kurt Cobain: Montage of Heck'
filmThe singers widow and former bandmates have approved project
PROMOTED VIDEO
News
ebooksNow available in paperback
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Langley James : IT Support; Helpdesk, VMware; Manchester, £18k

£16000 - £18000 per annum: Langley James : IT Support; Helpdesk, VMware; Manch...

h2 Recruit Ltd: Business Development Manager - HRO - £70k+ ote

£35000 - £450000 per annum + £3k car, £70k ote: h2 Recruit Ltd: Do you want to...

Citifocus Ltd: Newly Qualified Accountants - Risk Mgmt

£Attractive Package: Citifocus Ltd: Prestigious financial institution seeks to...

Citifocus Ltd: Operational Risk Analyst

£Negotiable: Citifocus Ltd: Experienced operational risk professional with ban...

Day In a Page

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

Sarkozy returns

The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
Is the criticism of Ed Miliband a coded form of anti-Semitism?

Is the criticism of Miliband anti-Semitic?

Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

Ouija boards are the must-have festive gift

Simon Usborne explores the appeal - and mysteries - of a century-old parlour game
Can SkySaga capture the Minecraft magic?

Can SkySaga capture the Minecraft magic?

It's no surprise that the building game born in Sweden in 2009 and now played by millions, has imitators keen to construct their own mega money-spinner
Christmas 2014: 23 best women's perfumes

Festively fragrant: the best women's perfumes

Give a loved one a luxe fragrance this year or treat yourself to a sensual pick-me-up
Homeless Veterans Christmas Appeal: Drifting and forgotten - turning lives around for ex-soldiers

Homeless Veterans Christmas Appeal: Turning lives around for ex-soldiers

Our partner charities help veterans on the brink – and get them back on their feet
Putin’s far-right ambition: Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU

Putin’s far-right ambition

Think-tank reveals how Russian President is wooing – and funding – populist parties across Europe to gain influence in the EU
Tove Jansson's Moominland: What was the inspiration for Finland's most famous family?

Escape to Moominland

What was the inspiration for Finland's most famous family?
Nightclubbing with Richard Young: The story behind his latest book of celebrity photographs

24-Hour party person

Photographer Richard Young has been snapping celebrities at play for 40 years. As his latest book is released, he reveals that it wasn’t all fun and games
Michelle Obama's school dinners: America’s children have a message for the First Lady

A taste for rebellion

US children have started an online protest against Michelle Obama’s drive for healthy school meals by posting photos of their lunches
Colouring books for adults: How the French are going crazy for Crayolas

Colouring books for adults

How the French are going crazy for Crayolas
Jack Thorne's play 'Hope': What would you do as a local politician faced with an impossible choice of cuts?

What would you do as a local politician faced with an impossible choice of cuts?

Playwright Jack Thorne's latest work 'Hope' poses the question to audiences
Ed Harcourt on Romeo Beckham and life as a court composer at Burberry

Call me Ed Mozart

Paloma Faith, Lana del Ray... Romeo Beckham. Ed Harcourt has proved that he can write for them all. But it took a personal crisis to turn him from indie star to writer-for-hire
10 best stocking fillers for foodies

Festive treats: 10 best stocking fillers for foodies

From boozy milk to wasabi, give the food-lover in your life some extra-special, unusual treats to wake up to on Christmas morning