Grosvenor estate: Ministers don’t get ‘basic economics’
The Duke of Westminster’s multi-billion pound estate has chided ministers for failing to grasp “basic economics” in their bid to tackle the housing crisis.
Mark Preston, who represents the business interests of Hugh Grosvenor, the seventh Duke of Westminster and owner of a Mayfair property empire, said the government risks choking housing supply if it “interferes” with demand.
The government’s pledge to build 1.5m homes by the next general election has been the subject of growing skepticism, as construction firms warn they are facing unprecedented costs.
Preston argued Labour should focus on boosting the housing supply rather than “interfering” with red tape which dampens construction progress and demand for housing.
The government has been warned that its renters’ rights act – which came into force this month – could dampen demand for new flats, and housebuilders have said biodiversity regulation gets in the way of construction.
‘This problem isn’t going away’
Preston said: “I don’t understand why that simple, basic economics is not understood better by all forms and colours of government.
“Until they focus on supply – and that means un-gumming the planning system, improving the supply chain, looking at different ways of procurement and also potentially getting involved in housing construction, centrally or locally – this problem isn’t going to go away.”
Preston said it is up to the government – not private housebuilders – to solve the housing crisis.
The UK’s fiscal watchdog has warned that net additions to the UK’s housing stock will fall from a 260,000 yearly average to a low point of 220,000 in 2026-27.
Labour’s loosening of planning rules is yet to “meaningfully materialise” in the speed of house building, the Office for Budget Responsibility (OBR) said.
The next election, the deadline for Labour’s house target, is expected to come in 2029 but the OBR said housebuilding will not meaningfully spike until 2030.
Grosvenor makes loss
The Grosvenor estate’s warning came as it reported “muted” results in its sprawling property empire, which includes up-market postcodes in Mayfair and Belgravia, rental homes in San Francisco and rural estates in Cheshire and Scotland.
The estate recorded a £43m pre-tax loss in the year to December, compared to a £24m profit in the year prior, as rental income fell after property sell-offs.
James Raynor, chief executive of Grosvenor’s property arm, said: “Real estate is an incredibly important sector for the UK economy.
“It is a massive catalyst for growth and growth potential, and it might be more sensible if we encouraged an environment where you felt you wanted to invest in this area to enhance that growth, rather than make people worried about it.”
Grosvenor holds more than £9.5bn in total assets under management, including more than £3bn in commercial property and £2.5bn in residential estates.