The problem at the moment lies at the local level, and there are issues there that are difficult to resolve. But if you could, then I think the industry could build 10% more homes a year. In the longer term, I think that to solve the problem of undersupply there has got to be some development on greenfield land. If we had more planning certainty, we wouldn't need such a long landbank and that would be great for our balance sheet.
Much of the present planning delay has been attributed to PPG3 – what do you think of the guidance?
I'm concerned about it. I don't think its one-size-fits-all approach works. I worry that we are providing overdensely populated areas of housing with too few car parking spaces and small gardens in some areas. My fear is that in years to come, developers will be accused of building poor schemes. I think that if it weren't for the undersupply, there would be many unsold mid-terrace three-storey houses. The restriction on supply has helped PPG3.
Would you be willing to use modern methods of construction to deliver more homes?
We already have trading agreements with manufacturers and build 1600 steel and timber-frame homes a year. I think it's a must for our industry to keep moving forward on it. I do think there will be a day when planning is sorted out, and we need to be ready for it. But I believe that in order to get the volumes, we need the manufacturers to become heavily involved and committed. I don't think people should expect housebuilders to resolve issues of production lines, logistics and so on. There was a time when we couldn't afford to fit PVCu windows into homes, but manufacturers worked to bring the price down. If we could have a better and more consistent planning system, shorter landbanks and better balance sheets, and be supported by the manufacturing industry, housebuilders could be building 20,000 homes a year.
How does the market look for 2004?
It started very strongly this year. The key to our market is employment prospects and they are looking good. Interest rates are rising, but still low, and there is still undersupply, so there are three positive factors.
But what about the first-time buyer?
We sell 20% of our homes to first-time buyers and they are always the most important sector of the market. Our average selling price in the North is £138,000 – so people can slot in at the bottom of the market. We can never allow the first-time buyer to be priced out, but in the South the shortage makes things more difficult.