Steve Morgan, outgoing executive chairman of Redrow and founder of the Deeside-based housebuilder, spoke to Place North West to reflect on the Government’s “totally wrong” Help to Buy caps, battles with NIMBYism, and his achievements in more than 40 years at the business.
Morgan announced his retirement on Wednesday from the company he founded in 1974, and will step down in March next year to hand the reins to incumbent chief executive officer John Tutte, who will take up the role of executive chairman. Matthew Pratt, who is currently regional chief executive of Redrow’s southern business, will become chief executive officer.
But Morgan will still take an active role in the sector, starting with lobbying the Government to rethink caps on its recently-announced Help to Buy extension, outlined by the Chancellor in last week’s Budget, which he said “got it wrong in the extreme”.
The Help to Buy system will be replaced with a new version, starting in 2021 and running to 2023. However, anyone looking to purchase a house in the North West can only use Help to Buy on a price of up to £224,400. This compares with prices of £437,600 in the South East, and £349,000 in the South West.
Calling on the housing sector to “lobby hard” to change the Government’s view, Morgan said: “How is it fair that the cap should be £224,000 in the North West and much higher in the South East, when someone in a more affluent area of the North West – say Sale or Altrincham – will be paying more for a house than someone in Kent, for example?
“It’s wrong in the extreme and it’s letting first-time buyers down. If the Government says it wants to support the so-called Northern Powerhouse then it needs to lift that cap.”
Morgan also said the group would continue to look across different boroughs to develop housing schemes, although some local authorities “just don’t take the responsibility to get houses built seriously”.
“Our product naturally lends itself towards leafier neighbourhoods because it’s a more premium offering but we are happy to work anywhere in the North West.
“The disadvantage of that is in some areas the NIMBYs are alive and kicking, but it’s our job to deal with it.”
A number of Redrow developments in the North West have been subject to public objection, not least at Calderstones Park in Liverpool, and also in Macclesfield, where the local parish council is exploring a judicial review into a consent for the housebuilder in Henbury.
However, Morgan said it will “take a long time to change perceptions” about housebuilders with people being noisier about objecting to developments than supporting them, but added: “It’s not acceptable to say ‘we don’t need to build more homes’ any more. We’ve completely failed as a country to build enough and we all know it.”
Criticism of housebuilders has come to head this week with Persimmon chief executive Jeff Fairburn leaving the company following controversy over his £75m bonus.
While Morgan said the bonus was “completely obscene”, he said the incident had “tainted all housebuilders”.
“Housebuilders have got a bad rap particularly from the media with some people tarring us all with the same brush,” he said.
“I would prefer to respond with some facts: since we were founded we have delivered £2.7bn of community infrastructure – roads, schools, health centres – 2,300 hectares of public open space, 36,000 direct jobs, a further 200,000 indirect employees, and trained 2,000 youngsters. We don’t get the headlines for that, and I’m very proud of it: I can step down with my head held high.”
Morgan made £152m last September from the sale of 25.9m Redrow shares, held by his company Bridgemere Group and his charity The Steve Morgan Foundation. The proceeds of the sell-off to institutional investors, at 590p a share, was split between the two companies; Bridgemere still controls around 25% of Redrow.
Morgan’s retirement in March will be 10 years almost to the day since he returned to the company in 2009, after initially leaving in 2000.
“The business was in a hell of a mess in 2009 and it seems like the stars have aligned that I can retire on the 10th anniversary of coming back,” he said.
“You have to think ‘when is it the right time?’ and if there is one, it feels like now. We recently had our 100,000th completion, which is a proud moment for me personally; there are 300,000 people living in a Redrow home, that’s more than the amount of people who live in the city of Newcastle.
“I’m leaving the company in fantastic shape, we have £132m cash at the bank after record results, and I’m leaving behind a bloody great team. John [Tutte] is brilliant and Matthew [Pratt] is stepping up to chief operating officer – there’s little he doesn’t know. It’ll be more of the same from Redrow, but with a different captain of the ship.”
He will be leaving the company with a turnover of £1.92bn and an operating profit of £382m as of its 2018 results – its strongest results in its near 45-year history.
Morgan added he would look to devote his time to his charity, the Steve Morgan Foundation, once he retires next year. Since its foundation in 2001, the charity has committed £35m to causes in North Wales, Merseyside, and Cheshire.