Generation rent 'failed by the Government on housing'

Redrow boss issues warning after Truss and Sunak vow to ditch housing targets

Generations of aspiring homeowners are being failed by the Government and will struggle to get on the property ladder without major planning reforms, the boss of Redrow has claimed.

In a warning shot to Tory leadership candidates Liz Truss and Rishi Sunak, Matthew Pratt said saving up a deposit without help from the “bank of mum and dad” was now almost impossible for a current generation of renters. 

He warned the problem will only get worse without reforms to ensure more planning permissions are granted, allowing home building to be ramped up

His comments come after both Ms Truss and Mr Sunak vowed to ditch national housing targets if they become Prime Minister.

Mr Pratt told the Telegraph: “We're letting down future generations. You can see that from the average age of first time buyers, which has been going up year on year.

"If you don't have access to the bank of mum and dad, I would fear for anyone trying to get on the housing market because they've got to pay rent while saving up and it's not easy.

"I think previous generations are ignoring this issue, because they didn't have the same problems.”

In England, a typical home now costs 8.7 times the disposable income of an average household, according to official figures. In 1999, when records began, it was 4.4 times.

Mr Pratt pointed to London as an example of the problem. An average home in the capital now costs £526,000, up from £304,000 a decade ago. First time buyers need to raise a £26,300 deposit even for a 95pc mortgage. 

“How do you do that without the bank of mum and dad?” Pratt said. “You've got a whole generation who cannot afford to do it. It is unfair to burden them with that.”

He also hit back at Ms Truss’s description of housing targets as “Stalinist” and said the only way to make housing more affordable was to increase supply. 

“I have to disagree,” he said. “If you know you’ve got population growth, you should be planning properly for it. 

“The only way you can improve affordability is to increase supply. But it has got to be serious supply to have an effect on prices. 

"People think we're a nation of house builders, but if you actually compare us to other European countries many of them are doing far more than us to help future generations."

The Government pledged to build 300,000 homes a year in 2017 but the target has never been reached, with output peaking at 242,700 new homes in 2019/20. 

By comparison, France built 381,600 homes in 2020, according to Deloitte. Between 2010 and 2017, construction averaged 370,000 per year.

Mr Pratt said Britain should consider adopting a zonal planning system, of the kind that was unsuccessfully proposed by Boris Johnson. The plans were dropped in the face of grassroots Tory opposition last year.

At the time, Mr Johnson had claimed the current planning system was “outdated and ineffective” and proposed one where developments would be “automatically secured” in designated zones. 

But the Campaign to Protect Rural England branded the plans “a top-down developers’ charter” and said they were “rightly binned”.

Liz Truss, the favourite to be the next PM, has vowed to ditch national housing targets Credit: Finnbarr Webster/ Getty Images Europe

Both Ms Truss and Mr Sunak have since pledged to give communities a stronger say in development, as well as promising to block building on greenbelt land and abolish housing targets. 

Ms Truss has instead suggested focusing on brownfield sites in “opportunity areas”, while Mr Sunak has advocated punishing developers who gain planning permission but do not build on sites.

A government spokesman said: “We are changing the planning system to speed up the process so decisions can be made quicker.  

“Before the pandemic housebuilding reached the highest level in over 30 years – with over 242,000 homes built. 

“We are building on this success by investing £11.5 billion in affordable housing and £1.8 billion to regenerate derelict land for local housing, helping young people into home ownership and delivering new homes across the country.”