Planning System Creates Major Obstacles for Small Housebuilders – Steve Morgan

Steve Morgan CBE, Chairman and Founder of  Redrow, told HBF at the Housing Policy Conference that it would almost be impossible for him and the top ten housebuilders to create their companies today. Predominantly due to the planning system which has created major obstacles for small housebuilders as it is not fit for purpose.

Mr Morgan, 65, set up Redrow in 1974 in North Wales as a small Civil Engineering company before growing it into a national business that now builds more than 5,000 homes each year.

This would also apply for Tony Pidgley, co-founder and Chairman of the Berkeley Group, who established the luxury housebuilder in 1979 at the age of 29. The Barnado’s boy who was adopted at the age of 4 and left school, and home aged just 15 is now considered to be one of the most revered names in property, delivering £3 billion in profits last year and 20,000 homes in the past five years.

Yet both Steve and Tony would not been able to create their business in today’s environment, Mr Morgan stated, arguing that the planning scheme acts as a barrier for small and medium sized enterprises.

Mr Morgan said:

“Why has there been such a dramatic decline in the number of SMEs? Why would a young Steve Morgan or Tony Pidgley find it almost impossible to build a major homebuilding company today?  Finance, or lack of it of course, is partly to blame, but the main reason is the bureaucratic planning system which is a huge obstacle for SMEs and is simply not fit for purpose. 

“Going from an outline to implementable planning permission, which used to take six weeks, now frequently takes 18 months and costs tens of thousands of pounds, sometimes hundreds of thousands of pounds.  Make no mistake, the planning system is a huge barrier to entry.  It is crucifying small builders who are no longer able to manage the process. Only the strong survive, i.e. those of us who have the knowledge and financial muscle to take on the system.”

“To help us we need:

  • a speedier and simplified planning system,
  • a dramatic reduction in Stamp Duty
  • and an ongoing commitment on Help to Buy. 

 

“Then together, we will deliver the homes our country needs.”