Help to Buy’s a godsend, says £22m builder: Redrow founder set for a dividend bonanza after record revenues
Redrow’s founder branded Help to Buy a ‘godsend’ as his firm prepared to hand him almost £22m in a dividend bonanza.
Steve Morgan, the builder’s executive chairman, said ministers would be ‘crazy’ to scrap the taxpayer-backed scheme which doles out loans to families buying new-build homes.
The comments came as the company reported record revenues and profits and promised shareholders a dividend worth 28p a share – putting Morgan in line for £21.7million.
Redrow boss Steve Morgan said ministers would be ‘crazy’ to scrap the taxpayer-backed scheme which doles out loans to families buying new-build homes
Help to Buy is due to run to 2021 but could be extended by another two years despite critics claiming it drives up prices and is increasingly used by the better off. Morgan, 65, insisted it had been ‘a godsend for buyers and the industry’.
He said: ‘Help to Buy has been a fantastic success story. It’s got hundreds of thousands of people in their first home that would not have been able to otherwise.
‘But if for some crazy reason it wasn’t continued, what would happen? The Government would have to increase substantially social housing expenditure. And is that what they really want?’
Redrow booked a 21 per cent rise in profits to a record £380million for the year to June 30.
This was partly due to 1,850 homes sold under Help to Buy, around a third of the total.
Housebuilders are reaping millions of pounds off the back of what is effectively a taxpayer subsidy. Last month Persimmon reported a record first-half profit of £516million.
Simon French, of Panmure Gordon, said: ‘If you look at how the margins of housebuilders have changed since 2013, when Help to Buy was introduced, they have gone up from about 16 per cent to 21.5 per cent.’
A Government spokesman said: ‘Help to Buy is limited to new-build properties to drive up the number of homes being built, as well as helping people to afford a deposit to buy a home.’