Woman first: Taylor Wimpey boss Jennie Daly
Jennie Daly, the CEO of Taylor Wimpey, knows how divisive housing can be. She was born in Derry in 1970, when a wave of political violence swept Northern Ireland.
“Housing was a major social and community problem,” she says. ‘There was a high degree of underinvestment, resulting in many conflicts.’
After the Second World War, Northern Ireland suffered from a shortage of social housing and there were protests against anti-Catholic discrimination in housing.
“I am the youngest of four children,” she says. ‘Before I was born, my parents lived in a flat on the third floor with one water tap on the ground floor.
‘For a while, one of my brothers and sisters had to live with my grandmother in the countryside. No one wants to choose a child for whom there is no room. That made me understand the importance of housing for me.”
It certainly provides a stark perspective on the housing divide in Britain today – between young and old, North and South, rich and poor.
The government is well aware that this is a flashpoint. Housing Secretary Michael Gove warned last week that if young people cannot buy their own home, they could give up on democracy.
Prime Minister Rishi Sunak last week unveiled a plan to boost housing construction in urban areas to meet demand for new homes without alienating voters in the counties.
Daly, 53, points to ‘a shortage of four and a half million homes in Britain’ and says we need a national housing plan.
Local plans, she says, are “patchy in adoption” and decision-making at that level is “very challenging.”
A national plan, she argues, is essential so that issues such as transport links, flood risks, employment and the economy can be considered in a wider context when deciding where to build.
She acknowledges that it is ‘challenging to deliver results in a way where the existing community does not feel their services are under pressure’.
She adds: ‘There is a danger in planning that we feel like it is too big to handle. But we can’t just say it’s too difficult.’
The idea of a young person buying a one-bedroom apartment and renting it for a few years is probably no longer valid
She points out that stamp duty is “certainly an area” where Chancellor Jeremy Hunt could act.
Property purchases under £250,000 will not be subject to stamp duty, but homes costing between £250,001 and £925,000 will be charged 5 per cent. It will then rise from 10 per cent to a top rate of 12 per cent on values above £1.5 million.
First-time buyers pay no stamp duty on properties valued at £425,000 or less.
Daly says there is “a real argument” for reducing stamp duty on lower value homes, and that “there is certainly an argument for the downsizing side”.
A further reduction in the levy for first-time buyers – and for older people who want to trade in a house that is too big for them after their children have left home – would free up the market.
“We are dealing with overcrowding at the bottom of the market and understaffing at the top,” Daly says. ‘So it would be an intelligent step.
‘House moving drives the economy. We need to look at the dampening effect of stamp duty.
‘Mobility is fundamental to a healthy economy. When that is made more difficult because there is a tax like stamp duty or a lack of availability of housing, then you start to limit the economic options of the individual and the economy.
‘In the absence of suitable housing of the right size, household formation will stop, birth rates will fall, mobility will decline and the housing market will atrophy.’
Does she think there has been a fundamental shift in the real estate market in recent years? Will this generation of young people ever be able to enjoy the kind of housing security and wealth that their parents and grandparents enjoyed?
She doesn’t go that far, but suggests that the idea of the housing ladder – where people trade up for bigger and better properties – is no longer valid.
Changing times: First-time buyers are getting older, which means they may not start with a small property and move up in the same way as their parents, says Daly
‘The idea of a young person buying a one-bedroom flat and renting it for a few years is probably no longer valid.’
She says that starters nowadays are generally older and have probably already formed a household with a partner and children.
“They want a bigger house and they’re more likely to stay there for a longer period of time,” Daly says. ‘My generation thought of housing as a ladder you went up, but that concept is changing.’
‘Bones and nuts approach’
In terms of her strategy at Taylor Wimpey, she is not focused on radical change, but on operational excellence and serving customers. That means efficiency, discipline, cost control and delivery on time and within budget.
“We talk a lot about keeping things as simple as possible, about discipline,” she says. ‘We entered the current market with a very strong balance sheet and an experienced top team. I inherited a company in a very good place. I concentrated on the nuts and bolts.”
Whether it’s a coincidence or not, this is an approach she shares with other female bosses, including Margherita Della Valle at Vodafone.
However, residential construction remains a man’s world. Daly is Taylor Wimpey’s first female CEO in more than a century of history.
Her awareness of the social side of housing is a change from the crass greed exhibited by some male bosses, such as Jeff Fairburn, the former CEO of Persimmon. He brought the entire industry into disrepute with his £75 million bonus.
“If there’s a negative story, it impacts all homebuilders,” she says.
Daly has a basic salary of £750,000 plus £75,000 pension contributions, plus a performance-related bonus of up to £1.1 million and shares worth up to £1.5 million.
She has been involved in clearing up a number of scandals, most notably the leasehold affair, where thousands of people who bought homes from Taylor Wimpey – and properties from other companies – were stuck with leasehold charges that doubled every ten years.
These rising bills made it difficult to sell or remortgage. Ahead of an investigation by the Competition and Markets Authority, Taylor Wimpey agreed to free homebuyers from the trap.
“We accepted it wasn’t appropriate,” she says. “We made a £130 million provision and I went to freeholders for a number of years to renegotiate those leases.
“There is a long line of cases, but it continues. An apology was necessary and we sincerely apologize for that.”
Taylor Wimpey was also embroiled in the cladding scandal that followed the Grenfell Tower tragedy. The company has set aside hundreds of millions of pounds to pay for the removal of unsafe cladding.
Daly points to a crisis looming over Britain’s housing stock. Despite the efforts of the Luftwaffe, 40 percent of homes in Britain are pre-war.
“We have the oldest stock in the world and some of it is really energy inefficient,” she says. ‘This aging housing stock is not suitable for the future.’
I asked Daly if she’s ever lived in a house built by her company.
“I joined Taylor Wimpey ten years ago and have lived in my current home with my family for seventeen years,” she says.
“So no, I’ve never had one. Maybe my next step. Some of them are really beautiful.’
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