Landsec boss Mark Allan has fired a warning shot at property executives complaining about the costs of building affordable housing, saying they risked feeding a “perception issue” among the wider public.
Speaking at a MIPIM online panel discussion this afternoon, Allan said there was “something not quite right” about developers complaining they were out of pocket when chief executives were simultaneously receiving hefty bonuses.
“It does point to the big perception issue that the real estate sector has. It cannot afford to pay for affordable housing but it can afford to deliver high-rise residential in the middle of London, a large proportion of which stand empty half the time.
“It cannot afford to deliver enough affordable housing or housing schemes, but it can afford to pay £75m bonuses to CEOs that have benefited from the [government’s] Help-to-buy scheme,” he added.
In 2018, Jeff Fairburn, who was chief executive of Persimmon at the time, collected a £75m bonus. Fairburn was ousted from the role months later. That same year, Allan, then chief executive of St Modwen, forfeited his annual bonus of £661,000 before moving to Landsec.
Allan was responding to comments from fellow panellists including Roger Madelin, joint head of British Land’s major redevelopment scheme at Canada Water.
Madelin said: “We should stop pretending that somehow developers in tough situations like London can subsidise social housing, other kinds of affordable housing and deliver the numbers that we want.”
“[The costs] cannot come out of the development industry unless you expect it to really slow down,” he added.
But Allan hit back that industry bosses should “make sure that we’re not too introspectively looking at … how difficult it is for us to do certain things”.
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