Housing crunch will follow credit crunch
In an interview with the Sunday Telegraph yesterday Greg Fitzgerald, chief executive of housebuilder Galliford Try, said the shortage in housing supply is being masked by more immediate issues in the mortgage market.
He said: “I think there’s a crunch point at the moment. But it’s being hidden by the fact that the mortgage availability isn’t great.”
He indicated that when the mortgage market finally recovers, consumers will be faced with another barrier to home ownership in the form of depleted housing stocks.
Fitzgerald said the government has confirmed that up until 2030 this country needs to build 240,000 units a year to meet its housing needs.
But he added: “Leading up to 2007, 2008, we were always 50,000 to 60,000 short per year.
“Today we are probably building 115,000. Every year that goes by, the shortage in supply is becoming worse.”
He blames the new planning system which gives more autonomy to local authorities for much of the problem which he refers to as “managing by appeal”.
He said: “You get a recommendation for approval by the officers and the councilors are turning it down, probably knowing in their heart of hearts that Galliford Try or whoever will win at appeal.”
He added that the delay adds months to the process, tying up capital and wants more planning officers to speed up the appeal process.