Redrow plc was one of the largest British housebuilders with a network of 12 operational divisions across the UK. It was based in Flintshire , Wales and employed 2,300 people. In October 2024, its merger with Barratt Developments was finalised and it became Barratt Redrow .
101-407: The company was established in 1974 by Steve Morgan with an initial focus on civil engineering ; it was not until 1982 that the business made its entry into the housebuilding sector. Redrow expanded rapidly during the mid 1980s, both geographically and in terms of business activity; by the end of the decade, it was selling in excess of 1,000 houses per year. The firm completed multiple acquisitions in
202-450: A controlling share of 51% in return for a cash injection of £73 million. This was rejected, reportedly because it valued the club at £61 million, which the board felt was too low. In an interview in 2021 Morgan disputed the figure stating he had in fact valued the club at £140 million In 2007, an opportunity arose to purchase Wolverhampton Wanderers , a club which he had previously regarded as his "second club". Morgan agreed to buy
303-478: A crisis of ideas in mainstream economics and within the economics profession, and call for a reshaping of both the economy, economic theory and the economics profession. They argue that such a reshaping should include new advances within feminist economics and ecological economics that take as their starting point the socially responsible, sensible and accountable subject in creating an economy and economic theories that fully acknowledge care for each other as well as
404-602: A five-year period (2015-20). The company was also admitted to the FTSE4Good Index , for demonstrating strong Environmental, Social and Governance (ESG) practices. During October 2022, Redrow became one of the first house builders to implement the New Homes Quality Board's new code of practice, an independent not-for-profit organisation that has been set up to offer better protection and increased transparency for customers. In January 2023, Redrow became
505-490: A minimum, there's a little 'froth' [in the U.S. housing market]...it's hard not to see that there are a lot of local bubbles". The Economist , writing at the same time, went further, saying, "[T]he worldwide rise in house prices is the biggest bubble in history". Real estate bubbles are (by definition of the word "bubble") followed by a price decrease (also known as a housing price crash ) that can result in many owners holding negative equity (a mortgage debt higher than
606-464: A new mobile app, helping homeowners find their new home; the app is the first and only one of its type on iOS and Android. On 7 February 2024, Barratt Developments made an agreed offer to acquire the company for £2.5 billion; on the same date, both firms had confirmed reduced revenue and profit. The merged businesses would create a house builder turning over £7.45bn and delivering over 22,600 homes per year. Subject to regulatory and shareholder approval,
707-572: A resolution preventing CFTC from regulating derivatives for another six months — when Born's term of office would expire. Ultimately, it was the collapse of a specific kind of derivative, the mortgage-backed security , that triggered the economic crisis of 2008. Paul Krugman wrote in 2009 that the run on the shadow banking system was the fundamental cause of the crisis. "As the shadow banking system expanded to rival or even surpass conventional banking in importance, politicians and government officials should have realised that they were re-creating
808-544: A result of the outbreak of the Great Recession , Redrow was subjected to extremely difficult trading conditions during the late 2000s, including a halving of house sales in the latter part of 2008; in early 2009, the firm made efforts to reduce its debt burden to below £255 million by the mid point of the year. In March 2009, Steve Morgan returned to Redrow as executive chairman, having increased his shareholding to just under 30 percent. In October 2009, Redrow announced
909-533: A second successive relegation in the 2012–13 season, Wolves played in League One in the 2013–14 season and finished as champions with a record 103 points, returning to the Championship. In October 2013, he was criticised for inviting former Merseyside Chief Constable Norman Bettison as his guest in the directors' box at a Wolves away match. Bettison is a controversial figure for his role in connection with
1010-770: A sharp drop in international trade , rising unemployment and slumping commodity prices. Several economists predicted that recovery might not appear until 2011 and that the recession would be the worst since the Great Depression of the 1930s. Economist Paul Krugman once commented on this as seemingly the beginning of "a second Great Depression". Governments and central banks responded with fiscal policy and monetary policy initiatives to stimulate national economies and reduce financial system risks. The recession renewed interest in Keynesian economic ideas on how to combat recessionary conditions. Economists advise that
1111-691: A stepson Hugo. Morgan owns a second home on the Caribbean island of Antigua . The 2024 Sunday Times Rich List estimated his net worth at £915 million. In February 2019, Morgan received an apology and damages from the Daily Mail after being falsely accused of buying Redrow properties at an undervalue. He commented, having brought a libel claim at the High Court in London, "It is a shame that it has taken 18 months for justice to be served and for
SECTION 10
#17328018404081212-510: A tool for taking excessive risks. Examples of vulnerabilities in the public sector included: statutory gaps and conflicts between regulators; ineffective use of regulatory authority; and ineffective crisis management capabilities. Bernanke also discussed " Too big to fail " institutions, monetary policy, and trade deficits. There are several "narratives" attempting to place the causes of the recession into context, with overlapping elements. Five such narratives include: Underlying narratives #1–3
1313-413: Is a hypothesis that growing income inequality and wage stagnation encouraged families to increase their household debt to maintain their desired living standard, fueling the bubble. Further, this greater share of income flowing to the top increased the political power of business interests, who used that power to deregulate or limit regulation of the shadow banking system. Narrative #5 challenges
1414-457: Is granted. On 7 October 2024, after the CMA investigation was closed, the company became Barratt Redrow plc. In February 2024, Barratt and Redrow were among eight UK house-builders targeted by the CMA in an investigation into suspected breaches of competition law. The CMA said it had evidence that firms shared commercially sensitive information with competitors, influencing the build-out of sites and
1515-466: Is the timing. Subprime lending increased from around 10% of mortgage origination historically to about 20% only from 2004 to 2006, with housing prices peaking in 2006. Blaming affordable housing regulations established in the 1990s for a sudden spike in subprime origination is problematic at best. A more proximate government action to the sudden rise in subprime lending was the SEC relaxing lending standards for
1616-515: The American Enterprise Institute , which advocates for private enterprise and limited government, have asserted that private lenders were encouraged to relax lending standards by government affordable housing policies. They cite The Housing and Community Development Act of 1992, which initially required that 30 percent or more of Fannie's and Freddie's loan purchases be related to affordable housing. The legislation gave HUD
1717-620: The COVID-19 pandemic in the United Kingdom during early 2020. The site closures pushed house sales down by a third. In a trading update, Redrow said it had completed 4,032 homes up to 28 June 2020 in comparison to 6,443 in 2019. Turnover was expected to be £1.34bn against £2.11bn in 2019. In June 2020, following a review of its divisions, Redrow opted to scale-back its London operations to focus on its Colindale Gardens development and announced it would continue to target future growth on
1818-492: The Commodity Futures Trading Commission , put forth a policy paper asking for feedback from regulators, lobbyists, and legislators on the question of whether derivatives should be reported, sold through a central facility, or whether capital requirements should be required of their buyers. Greenspan, Rubin, and Levitt pressured her to withdraw the paper and Greenspan persuaded Congress to pass
1919-415: The Daily Mail to recognise its wrongdoing, however, I am pleased the record has now been set straight and that we may now draw a line under this issue." The damages were paid towards adapted minibuses for two special needs schools. Great Recession The Great Recession was a period of market decline in economies around the world that occurred from late 2007 to mid-2009. The scale and timing of
2020-441: The Great Recession took hold, sales roughly halved and the company incurred losses during the latter part of the decade. During 2009, Steve Morgan opted to return to Redrow, and even endeavoured to take full ownership of the company in 2012, though this ambition was unfulfilled. In the mid-2010s, the firm achieved record profits once again and recorded its 100,000th customer on 18 October 2018. One year later, Steve Morgan retired for
2121-575: The Hillsborough football disaster in 1989. Wolves responded on its official Twitter account, "The story is that Sir Norman Bettison attended the Bradford City game in the same way he has attended many Wolves games in the past. Steve Morgan and Sir Norman Bettison have known each other for many years. Everyone connected with the club has the utmost sympathy and respect for the victims of Hillsborough and their families." In 2014 Morgan oversaw
SECTION 20
#17328018404082222-676: The IMF criteria for being a global recession only in the single calendar year 2009. That IMF definition requires a decline in annual real world GDP per‑capita . Despite the fact that quarterly data are being used as recession definition criteria by all G20 members , representing 85% of the world GDP , the International Monetary Fund (IMF) has decided—in the absence of a complete data set—not to declare/measure global recessions according to quarterly GDP data. The seasonally adjusted PPP ‑weighted real GDP for
2323-547: The recession varied from country to country (see map). At the time, the International Monetary Fund (IMF) concluded that it was the most severe economic and financial meltdown since the Great Depression . The causes of the Great Recession include a combination of vulnerabilities that developed in the financial system, along with a series of triggering events that began with the bursting of
2424-429: The 19th and early 20th centuries, the current banking panic is a wholesale panic, not a retail panic. In the earlier episodes, depositors ran to their banks and demanded cash in exchange for their checking accounts. Unable to meet those demands, the banking system became insolvent. The current panic involved financial firms "running" on other financial firms by not renewing sale and repurchase agreements (repo) or increasing
2525-416: The 19th century. Yet, over the past 30-plus years, we permitted the growth of a shadow banking system – opaque and laden with short term debt – that rivaled the size of the traditional banking system. Key components of the market – for example, the multitrillion-dollar repo lending market, off-balance-sheet entities, and the use of over-the-counter derivatives – were hidden from view, without
2626-498: The British Empire (CBE) in the 2016 Birthday Honours for philanthropic services. Morgan and his first wife Pamela divorced in 2000. They have two children together, Ross and Lindsey. Morgan also has a son with Janet Hill, Mark Hill. In 2002, Morgan married his second wife, Fiona Boustead with whom he has a daughter, Goldie and son, Red. They divorced in 2013. In 2016, he married businesswoman Sally Toumi, with whom he has
2727-544: The FCIC Republican minority dissenting report also concluded that U.S. housing policies were not a robust explanation for a wider global housing bubble. The hypothesis that a primary cause of the crisis was U.S. government housing policy requiring banks to make risky loans has been widely disputed, with Paul Krugman referring to it as "imaginary history". One of the other challenges with blaming government regulations for essentially forcing banks to make risky loans
2828-533: The Federal Reserve has been widely discussed, the main point of controversy remains the lowering of the Federal funds rate to 1% for more than a year, which, according to Austrian theorists , injected huge amounts of "easy" credit-based money into the financial system and created an unsustainable economic boom. There is an argument that Greenspan's actions in the years 2002–2004 were actually motivated by
2929-416: The Federal Reserve. Further, American International Group (AIG) had insured mortgage-backed and other securities but was not required to maintain sufficient reserves to pay its obligations when debtors defaulted on these securities. AIG was contractually required to post additional collateral with many creditors and counter-parties, touching off controversy when over $ 100 billion of U.S. taxpayer money
3030-690: The G20‑;zone, however, is a good indicator for the world GDP, and it was measured to have suffered a direct quarter on quarter decline during the three quarters from Q3‑2008 until Q1‑2009, which more accurately mark when the recession took place at the global level. According to the U.S. National Bureau of Economic Research (the official arbiter of U.S. recessions) the recession began in December 2007 and ended in June 2009, and thus extended over eighteen months. The years leading up to
3131-408: The Great Recession that began in the U.S. officially in December 2007 and lasted until June 2009, thus extending over 19 months. As with most other recessions, it appears that no known formal theoretical or empirical model was able to accurately predict the advance of this recession, except for minor signals in the sudden rise of forecast probabilities, which were still well under 50%. The recession
Redrow plc - Misplaced Pages Continue
3232-753: The Summit on Financial Markets and the World Economy," dated November 15, 2008, leaders of the Group of 20 cited the following causes: During a period of strong global growth, growing capital flows, and prolonged stability earlier this decade, market participants sought higher yields without an adequate appreciation of the risks and failed to exercise proper due diligence. At the same time, weak underwriting standards, unsound risk management practices, increasingly complex and opaque financial products, and consequent excessive leverage combined to create vulnerabilities in
3333-635: The UK, £50 million. Following the outbreak of COVID-19 in early 2020, Morgan pledged £1 million a week to charities to help vulnerable members of society cope with the fallout of the virus. That support was credited as a lifeline for hundreds of charities affected by Covid-19 particularly food banks, support for the homeless, domestic abuse charities and mental health organisations. The Foundation reported in December 2020 that Morgan had given over £27 million to charities impacted by COVID-19. His donations and beneficial projects have included: In 1992, Morgan
3434-552: The US, from $ 106,591 to $ 68,839 between 2005 and 2011. The US Financial Crisis Inquiry Commission , composed of six Democratic and four Republican appointees, reported its majority findings in January 2011. It concluded that "the crisis was avoidable and was caused by: There were two Republican dissenting FCIC reports. One of them, signed by three Republican appointees, concluded that there were multiple causes. In his separate dissent to
3535-615: The United States housing bubble in 2005–2012. When housing prices fell and homeowners began to abandon their mortgages, the value of mortgage-backed securities held by investment banks declined in 2007–2008, causing several to collapse or be bailed out in September 2008. This 2007–2008 phase was called the subprime mortgage crisis . The combination of banks being unable to provide funds to businesses, and homeowners paying down debt rather than borrowing and spending, resulted in
3636-483: The United States, and 21% in Denmark. Household defaults, underwater mortgages (where the loan balance exceeds the house value), foreclosures, and fire sales are now endemic to a number of economies. Household deleveraging by paying off debts or defaulting on them has begun in some countries. It has been most pronounced in the United States, where about two-thirds of the debt reduction reflects defaults." The onset of
3737-513: The academic definition, the recession ended in the United States in June or July 2009. Journalist Robert Kuttner has argued that 'The Great Recession' is a misnomer. According to Kuttner, "recessions are mild dips in the business cycle that are either self-correcting or soon cured by modest fiscal or monetary stimulus. Because of the continuing deflationary trap, it would be more accurate to call this decade's stagnant economy The Lesser Depression or The Great Deflation." The Great Recession met
3838-464: The bailout measures started under the Bush administration and continued during his administration as completed and mostly profitable as of December 2014 . As of January 2018 , bailout funds had been fully recovered by the government, when interest on loans is taken into consideration. A total of $ 626B was invested, loaned, or granted due to various bailout measures, while $ 390B had been returned to
3939-528: The bailouts. In 2008, TARP allocated $ 426.4 billion to various major financial institutions. However, the US collected $ 441.7 billion in return from these loans in 2010, recording a profit of $ 15.3 billion. Nonetheless, there was a political shift from the Democratic party. Examples include the rise of the Tea Party and the loss of Democratic majorities in subsequent elections. President Obama declared
4040-448: The business. In March 2019, 10 years to the day that Morgan returned, he retired from Redrow. When he left the company, its annual revenue had increased to more than seven times its 2009 figure to £2.1 billion ,profits were £406 million and it was valued at £2.2 billion. A shareholder and lifelong supporter of Liverpool football club, Morgan attempted several times to buy the club, most notably in 2004 when he made an offer to obtain
4141-575: The club as "an honour and a privilege that I will never forget". In June 2022, Morgan was linked with a bid to buy financially-troubled Derby County . In 2001 he founded the Steve Morgan Foundation, to which he has donated over £300 million, and which has provided support to more than 650 charities to date and funding ongoing awards. In 2022, the Foundation made the biggest ever philanthropic donation to diabetes research in
Redrow plc - Misplaced Pages Continue
4242-570: The club from Sir Jack Hayward for a token fee of £10 on condition he invested £30 million in the club. The takeover was formally completed on 9 August 2007 when Morgan became chairman. On handover, Hayward stated that Morgan had "had a heart transplant from Liverpool to Wolverhampton". In May 2009, Wolves were promoted, as champions, to the Premier League , but were relegated back to the Championship in May 2012 after three seasons. After suffering
4343-676: The company announced a new Southern division to expand the company's reach to Surrey and Sussex, which was opened in May 2022. In November 2021, it joined the UNFCCC Race to Zero and signed up to the Science Based Targets initiative (SBTi), supporting efforts to limit global warming to 1.5°C. In 2022, Redrow was included in the FT-Statista annual climate leaders list of companies achieving the greatest reductions in their Scope 1 and 2 greenhouse gas emissions intensity over
4444-485: The contract, borrowed £5,000 from his father, and completed the contract at a profit. Further work was carried out for Wellington and, still aged only 21, Morgan registered his new company – Redrow. Redrow gradually expanded through small civil engineering work and, with Simon Macbryde, formed a separate building company; these were later merged to leave Macbryde with 17 percent of the enlarged company. Geographically, Redrow moved from its north Wales base into Cheshire and in
4545-453: The crisis were characterized by an exorbitant rise in asset prices and associated boom in economic demand. Further, the U.S. shadow banking system (i.e., non-depository financial institutions such as investment banks) had grown to rival the depository system yet was not subject to the same regulatory oversight, making it vulnerable to a bank run . US mortgage-backed securities , which had risks that were hard to assess, were marketed around
4646-668: The crisis) and vulnerabilities (i.e., structural weaknesses in the financial system, regulation and supervision) that amplified the shocks. Examples of triggers included: losses on subprime mortgage securities that began in 2007 and a run on the shadow banking system that began in mid-2007, which adversely affected the functioning of money markets. Examples of vulnerabilities in the private sector included: financial institution dependence on unstable sources of short-term funding such as repurchase agreements or Repos; deficiencies in corporate risk management; excessive use of leverage (borrowing to invest); and inappropriate usage of derivatives as
4747-442: The current value of the property). Several sources have noted the failure of the US government to supervise or even require transparency of the financial instruments known as derivatives . Derivatives such as credit default swaps (CDSs) were unregulated or barely regulated. Michael Lewis noted CDSs enabled speculators to stack bets on the same mortgage securities. This is analogous to allowing many persons to buy insurance on
4848-482: The deal was expected to be completed in late 2024, and would see around 800 jobs lost (a 10% reduction in total employees) and nine offices close. In March 2024, the Competition and Markets Authority (CMA) opened an investigation into the proposed acquisition, assessing if it might "result in a substantial lessening of competition within any market or markets in the United Kingdom for goods or services." In May 2024,
4949-523: The downturn. In advanced economies, during the five years preceding 2007, the ratio of household debt to income rose by an average of 39 percentage points, to 138 percent. In Denmark, Iceland, Ireland, the Netherlands, and Norway, debt peaked at more than 200 percent of household income. A surge in household debt to historic highs also occurred in emerging economies such as Estonia, Hungary, Latvia, and Lithuania. The concurrent boom in both house prices and
5050-619: The early 1980s made significant construction acquisitions in Manchester and the Wirral. During 1982, Redrow opted to start constructing houses. By 1985, its activities in this sector had grown sufficiently to separate it out from the construction business. A small acquisition in Kent provided the base for a south-east housing operation; a Midlands -centric housing subsidiary was formed in 1986. During 1987, Redrow bought Whelmar Lancashire, one of
5151-619: The economic crisis took most people by surprise. A 2009 paper identifies twelve economists and commentators who, between 2000 and 2006, predicted a recession based on the collapse of the then-booming housing market in the United States: Dean Baker , Wynne Godley , Fred Harrison , Michael Hudson , Eric Janszen , Med Jones Steve Keen , Jakob Brøchner Madsen , Jens Kjaer Sørensen, Kurt Richebächer , Nouriel Roubini , Peter Schiff , and Robert Shiller . By 2007, real estate bubbles were still under way in many parts of
SECTION 50
#17328018404085252-405: The economic headwinds that slowed the recovery: On the political front, widespread anger at banking bailouts and stimulus measures (begun by President George W. Bush and continued or expanded by President Obama ) with few consequences for banking leadership, were a factor in driving the country politically rightward starting in 2010. The Troubled Asset Relief Program (TARP) was the largest of
5353-471: The fall of Lehman Brothers on September 15, 2008, a major panic broke out on the inter-bank loan market. There was the equivalent of a bank run on the shadow banking system , resulting in many large and well established investment banks and commercial banks in the United States and Europe suffering huge losses and even facing bankruptcy, resulting in massive public financial assistance (government bailouts). The global recession that followed resulted in
5454-495: The first large housebuilder to introduce air source heat pumps in all its upcoming developments as the firm moves away from traditional gas boilers. Underfloor heating would be provided as standard in its detached homes. The move to air source heat pumps will have the biggest impact to date on the efficiency of Redrow homes as it moves towards all-electric power systems in line with its commitment to achieving net zero carbon by 2050. During December 2023, Redrow developed and launched
5555-482: The five housing subsidiaries then being sold by Christian Salvesen . By that point, Redrow was selling over 1,000 houses per year. Further expansion took Redrow into the south-west, south Wales and Yorkshire; however, Redrow had pulled out of the vulnerable south-east market just ahead of the 1989 property collapse. Redrow returned to the south-east in 1993 as the housing recession neared its end, buying Costain Homes from
5656-454: The following recovery weaker. Robert Reich claims the amount of debt in the US economy can be traced to economic inequality , assuming that middle-class wages remained stagnant while wealth concentrated at the top, and households "pull equity from their homes and overload on debt to maintain living standards". The IMF reported in April 2012: "Household debt soared in the years leading up to
5757-536: The higher returning regional businesses and the Heritage product. That same year, Redrow partnered with Liverpool John Moores University to offer a degree in Construction Management to outside applications. Previously, the degree had only been open to Redrow employees; over 800 applications were received. During September 2021, Richard Akers became Redrow's non‐executive chairman. That same year,
5858-874: The housebuilder Redrow plc . Under his chairmanship, Redrow was floated on the London Stock Exchange in 1994, ultimately becoming a FTSE 250 Company. The 1990s saw Morgan also invest in hotels, developing St David's Park Hotel in North Wales and Carden Park in Cheshire, eventually merging his interests into the De Vere Group . In November 2000, after 26 years, Morgan stepped down as Redrow chairman, although his company, Bridgemere, remained one of its largest shareholders. In 2001 Morgan founded Brownfield specialist company Harrow Estates plc. In March 2009, Morgan returned in order to address
5959-694: The housebuilders Redrow plc , a former chairman of Wolverhampton Wanderers F.C. , and founder of the charitable Steve Morgan Foundation. Morgan was born in Garston , Liverpool , on 25 November 1952. The son of a plant hire operator, he came from a poor background with what he, in November 2021, called a “tough upbringing”, telling The High Performance Podcast that it was only at the age of seven that he knew what an inside toilet was. He moved home nine times during his childhood and consequently changed school nine times. His parents moved to Colwyn Bay when he
6060-473: The inflow of investment dollars required to fund the U.S. trade deficit was a major cause of the housing bubble and financial crisis: "The trade deficit, less than 1% of GDP in the early 1990s, hit 6% in 2006. That deficit was financed by inflows of foreign savings, in particular from East Asia and the Middle East. Much of that money went into dodgy mortgages to buy overvalued houses, and the financial crisis
6161-541: The kind of financial vulnerability that made the Great Depression possible – and they should have responded by extending regulations and the financial safety net to cover these new institutions. Influential figures should have proclaimed a simple rule: anything that does what a bank does, anything that has to be rescued in crises the way banks are, should be regulated like a bank." He referred to this lack of controls as "malign neglect". During 2008, three of
SECTION 60
#17328018404086262-568: The largest U.S. investment banks either went bankrupt ( Lehman Brothers ) or were sold at fire sale prices to other banks ( Bear Stearns and Merrill Lynch ). The investment banks were not subject to the more stringent regulations applied to depository banks. These failures exacerbated the instability in the global financial system. The remaining two investment banks, Morgan Stanley and Goldman Sachs , potentially facing failure, opted to become commercial banks, thereby subjecting themselves to more stringent regulation but receiving access to credit via
6363-545: The late 1980s and early 1990s, including buying Costain Homes from the Costain Group , increasing its housing ales to 2,000 per year. During 1994, having recovered from the early 1990s recession , the company was floated on the London Stock Exchange , after which Steve Morgan opted to gradually reduce his ownership stake in the business and depart the company in 2000. The 2000s proved to be particularly turbulent for Redrow; while record profits were recorded in 2005, as
6464-590: The main headline is that all sorts of poor countries became kind of rich, making things like TVs and selling us oil. China, India, Abu Dhabi, Saudi Arabia made a lot of money and banked it." Describing the crisis in Europe, Paul Krugman wrote in February 2012 that: "What we're basically looking at, then, is a balance of payments problem, in which capital flooded south after the creation of the euro, leading to overvaluation in southern Europe." Another narrative about
6565-466: The majority and minority opinions of the FCIC, Commissioner Peter J. Wallison of the American Enterprise Institute (AEI) primarily blamed U.S. housing policy, including the actions of Fannie and Freddie , for the crisis. He wrote: "When the bubble began to deflate in mid-2007, the low quality and high risk loans engendered by government policies failed in unprecedented numbers." In its "Declaration of
6666-662: The need to take the U.S. economy out of the early 2000s recession caused by the bursting of the dot-com bubble : although by doing so he did not avert the crisis, but only postponed it. Another narrative focuses on high levels of private debt in the US economy. USA household debt as a percentage of annual disposable personal income was 127% at the end of 2007, versus 77% in 1990. Faced with increasing mortgage payments as their adjustable rate mortgage payments increased, households began to default in record numbers, rendering mortgage-backed securities worthless. High private debt levels also impact growth by making recessions deeper and
6767-627: The number of direct jobs it had created (36,000), including 2,000 trainees, and a further 200,000 indirect employees. On 7 November 2018, it was announced that Steve Morgan would retire from the company in March 2019 with John Tutte taking over as executive chairman and Matthew Pratt as chief operating officer. One year later, Tutte himself announced his retirement, resulting in Matthew Pratt taking over as group chief executive. Like most housebuilders, Redrow temporarily closed most of its sites during
6868-544: The obligation and defaulted; U.S. taxpayers paid over $ 100 billion to global financial institutions to honor AIG obligations, generating considerable outrage. A 2008 investigative article in The Washington Post found leading government officials at the time (Federal Reserve Board Chairman Alan Greenspan , Treasury Secretary Robert Rubin , and SEC Chairman Arthur Levitt ) vehemently opposed any regulation of derivatives. In 1998, Brooksley E. Born , head of
6969-493: The opening of the club's multi-million pound Compton Park training complex. In July 2016, Morgan sold Wolves to the Chinese company Fosun International for £30 million. Morgan later revealed in an interview that he had turned down other offers but had accepted Fosun's bid because of the company's commitment to invest £100m into the club. Morgan signed off with an open letter to Wolves fans in which he described his time owning
7070-487: The origin has been focused on the respective parts played by public monetary policy (notably in the US) and by the practices of private financial institutions. In the U.S., mortgage funding was unusually decentralised, opaque, and competitive, and it is believed that competition between lenders for revenue and market share contributed to declining underwriting standards and risky lending. While Alan Greenspan's role as Chairman of
7171-530: The planet. Though no one knew they were in it at the time, the Great Recession had a significant economic and political impact on the United States. While the recession technically lasted from December 2007 – June 2009 (the nominal GDP trough), many important economic variables did not regain pre-recession (November or Q4 2007) levels until 2011–2016. For example, real GDP fell $ 650 billion (4.3%) and did not recover its $ 15 trillion pre-recession level until Q3 2011. Household net worth, which reflects
7272-522: The popular claim (narrative #4) that subprime borrowers with shoddy credit caused the crisis by buying homes they couldn't afford. This narrative is supported by new research showing that the biggest growth of mortgage debt during the U.S. housing boom came from those with good credit scores in the middle and top of the credit score distribution—and that these borrowers accounted for a disproportionate share of defaults. The Economist wrote in July 2012 that
7373-526: The power to set future requirements. These rose to 42 percent in 1995 and 50 percent in 2000, and by 2008 a 56 percent minimum was established. However, the Financial Crisis Inquiry Commission (FCIC) Democratic majority report concluded that Fannie & Freddie "were not a primary cause" of the crisis and that CRA was not a factor in the crisis. Further, since housing bubbles appeared in multiple countries in Europe as well,
7474-430: The prices of new homes. The company's flagship developments include: The company has commissioned research by two academics, Stefan Kruczkowski and Laura B. Alvarez, in order to develop eight principles of creating better places. Steve Morgan (businessman) Stephen Peter Morgan CBE (born 25 November 1952) is an English businessman, investor, and philanthropist. He is the founder and former chairman of
7575-414: The proposed acquisition. On 22 August 2024, Barratt officially took ownership of Redrow shares; both firms continue to operate independently until final CMA approval was granted on 7 October 2024, when the firm became Barratt Redrow plc. Steve Morgan had been working as a site agent for Wellington Civil Engineering when, in 1974, the parent company decided it was to be closed. Morgan offered to take over
7676-503: The proposed merger was approved by shareholders, but remained subject to CMA clearance. In August 2024, the CMA said the proposed merger only raised competition concerns in relation to developments around north Shropshire . Barratt and Redrow could make submissions to address the CMA's concerns to avoid the deal being subject to an in-depth phase two review. On 22 August 2024, Barratt officially took ownership of Redrow shares; both firms continue to operate independently until final CMA approval
7777-410: The protections we had constructed to prevent financial meltdowns. We had a 21st-century financial system with 19th-century safeguards. The Gramm–Leach–Bliley Act (1999), which reduced the regulation of banks by allowing commercial and investment banks to merge, has also been blamed for the crisis, by Nobel Prize –winning economist Joseph Stiglitz among others. Peter Wallison and Edward Pinto of
7878-402: The recession have been described as a symptom of another, deeper crisis by a number of economists. For example, Ravi Batra argues that growing inequality of financial capitalism produces speculative bubbles that burst and result in depression and major political changes . Feminist economists Ailsa McKay and Margunn Bjørnholt argue that the financial crisis and the response to it revealed
7979-488: The recovery was that both individuals and businesses paid down debts for several years, as opposed to borrowing and spending or investing as had historically been the case. This shift to a private sector surplus drove a sizable government deficit. However, the federal government held spending at about $ 3.5 trillion from fiscal years 2009–2014 (thereby decreasing it as a percent of GDP), a form of austerity . Then-Fed Chair Ben Bernanke explained during November 2012 several of
8080-461: The repo margin ("haircut"), forcing massive deleveraging, and resulting in the banking system being insolvent. The Financial Crisis Inquiry Commission reported in January 2011: In the early part of the 20th century, we erected a series of protections – the Federal Reserve as a lender of last resort , federal deposit insurance, ample regulations – to provide a bulwark against the panics that had regularly plagued America's banking system in
8181-429: The rest of the decade, reaching sales of 3,000 per year. In 2000, Steve Morgan announced his intention to leave the company, retaining only a 14 percent stake in the company; Paul Pedley, who had joined Redrow as finance director in 1995, took over as managing director. In 2005, Redrow recorded a record profit of £141 million, a seven per cent rise over the previous year. During 2006, Redrow saw its 50,000th customer. As
8282-499: The same house. Speculators that bought CDS protection were betting significant mortgage security defaults would occur, while the sellers (such as AIG ) bet they would not. An unlimited amount could be wagered on the same housing-related securities, provided buyers and sellers of the CDS could be found. When massive defaults occurred on underlying mortgage securities, companies like AIG that were selling CDS were unable to perform their side of
8383-406: The second time from Redrow. During the COVID-19 pandemic in the United Kingdom of the early 2000s, the company temporarily closed most of its sites and sales dipped by up to one-third. On 7 February 2024, Barratt Developments made an agreed offer to acquire the company for £2.5 billion, which met with shareholder approval; the Competition and Markets Authority (CMA) opened an investigation into
8484-511: The significant losses suffered by the company during the financial crisis. By 2010, the situation had improved markedly with the housebuilder reporting a pre-tax profit of £700,000 (compared to a £44.2m loss in 2009). After returning to Redrow, Morgan refocused the company's building projects on providing family homes by launching the New Heritage collection. On 18 October 2018 Redrow announced its 100,000th customer since Morgan founded
8585-518: The stimulus measures such as quantitative easing (pumping money into the system) and holding down central bank wholesale lending interest rate should be withdrawn as soon as economies recover enough to "chart a path to sustainable growth ". The distribution of household incomes in the United States became more unequal during the post-2008 economic recovery . Income inequality in the United States grew from 2005 to 2012 in more than two thirds of metropolitan areas. Median household wealth fell 35% in
8686-663: The stock market meant that household debt relative to assets held broadly stable, which masked households' growing exposure to a sharp fall in asset prices. When house prices declined, ushering in the global financial crisis, many households saw their wealth shrink relative to their debt, and, with less income and more unemployment, found it harder to meet mortgage payments. By the end of 2011, real house prices had fallen from their peak by about 41% in Ireland, 29% in Iceland, 23% in Spain and
8787-490: The system. Policy-makers, regulators and supervisors, in some advanced countries, did not adequately appreciate and address the risks building up in financial markets, keep pace with financial innovation, or take into account the systemic ramifications of domestic regulatory actions. Federal Reserve Chair Ben Bernanke testified in September 2010 before the FCIC regarding the causes of the crisis. He wrote that there were shocks or triggers (i.e., particular events that touched off
8888-498: The top investment banks during an April 2004 meeting with bank leaders. These banks increased their risk-taking shortly thereafter, significantly increasing their purchases and securitization of lower-quality mortgages, thus encouraging additional subprime and Alt-A lending by mortgage companies. This action by its investment bank competitors also resulted in Fannie Mae and Freddie Mac taking on more risk. The financial crisis and
8989-546: The troubled Costain Group ; this took Redrow's housing sales up to 2,000 per year. The construction business was sold on, resulting in Redrow becoming purely a development business. During 1994, the company was floated on the London Stock Exchange . Initially, Steve Morgan held 59 per cent of the company's shares; however, he opted to reduce his stake to 33 per cent in exchange for £95 million in 1997. Redrow grew steadily through
9090-520: The value of both stock markets and housing prices, fell $ 11.5 trillion (17.3%) and did not regain its pre-recession level of $ 66.4 trillion until Q3 2012. The number of persons with jobs (total non-farm payrolls) fell 8.6 million (6.2%) and did not regain the pre-recession level of 138.3 million until May 2014. The unemployment rate peaked at 10.0% in October 2009 and did not return to its pre-recession level of 4.7% until May 2016. A key dynamic slowing
9191-453: The word "recession" exist: one sense referring definitively to "a period of reduced economic activity" and ongoing hardship; and the more allegoric interpretation used in economics , which is defined operationally , referring specifically to the contraction phase of a business cycle , with two or more consecutive quarters of GDP contraction (negative GDP growth rate) and typically used to influence abrupt changes in monetary policy. Under
9292-687: The world, especially in the United States , France, the United Kingdom , Spain , the Netherlands, Australia, the United Arab Emirates, New Zealand , Ireland , Poland , South Africa , Greece , Bulgaria , Croatia , Norway , Singapore , South Korea , Sweden , Finland , Argentina , the Baltic states , India , Romania , Ukraine and China . U.S. Federal Reserve Chairman Alan Greenspan said in mid-2005 that "at
9393-454: The world, as they offered higher yields than U.S. government bonds. Many of these securities were backed by subprime mortgages, which collapsed in value when the U.S. housing bubble burst during 2006 and homeowners began to default on their mortgage payments in large numbers starting in 2007. The emergence of subprime loan losses in 2007 began the crisis and exposed other risky loans and over-inflated asset prices. With loan losses mounting and
9494-533: The worst fiscal results in its history, which included a 53 per cent drop in revenue and a pre-tax loss of £140.8 million. During 2010, Redrow launched its Heritage Collection followed by the Regent Collection and more modern Abode Collection. One year later, the company sold off its Scottish activities to Springfield Properties in exchange for £49 million. During 2012, Steve Morgan endeavoured to take over ownership of Redrow, although no conclusive offer
9595-606: Was 13, and he was educated at Colwyn High School and Liverpool Polytechnic (now Liverpool John Moores University), where he completed a two-year diploma course. Morgan entered the business world, aged 21, during the 1974 recession. His then employers, Wellington Civil Engineering, were on the verge of going out of business. Wellington was offered a new job laying sewers in Penley and Morgan offered to take it over. After Margaret Thatcher ’s reduction in public spending put an end to this work, he went on to develop this company into
9696-507: Was appointed Officer of the Order of the British Empire (OBE) for services to the construction industry. He is a fellow of the Institute of Builders , and holds honorary fellowships and doctorates at Cardiff University , Liverpool John Moores University , Glyndŵr University ., Wolverhampton University , and University of Chester . Morgan was appointed Commander of the Order of
9797-495: Was ever issued. That same year, the company's recorded that profits had doubled over the previous year. On 30 June 2014, John Tutte became Redrow's chief executive. In early 2016, the firm achieved a record profit of £104 million during the last six months of 2015 in spite of a downturn in the inner London market. In February 2017, Redrow acquired Radleigh Homes in Derby , an established company which delivered 200 new homes in 2016. It
9898-478: Was later re-branded as Redrow Homes (East Midlands). During September 2017, it was announced that Morgan would "ease back" to a non-executive chairman role with Redrow. That same year, Redrow announced that pre-tax profits had risen by 26 per cent to £315 million while revenues were up 20 per vent at £1.66 billion; it also withdrew from its effort to take over rival firm Bovis Homes . On 18 October 2018, Redrow announced its 100,000th customer and released statistics on
9999-542: Was not felt equally around the world; whereas most of the world's developed economies , particularly in North America, South America and Europe, fell into a severe, sustained recession, many more recently developing economies suffered far less impact, particularly China , India and Indonesia , whose economies grew substantially during this period. Similarly, Oceania suffered minimal impact , in part due to its proximity to Asian markets. Two interpretations of
10100-407: Was paid out to major global financial institutions on behalf of AIG. While this money was legally owed to the banks by AIG (under agreements made via credit default swaps purchased from AIG by the institutions), a number of Congressmen and media members expressed outrage that taxpayer money was used to bail out banks. Economist Gary Gorton wrote in May 2009 Unlike the historical banking panics of
10201-402: Was the result." In May 2008, NPR explained in their Peabody Award winning program " The Giant Pool of Money " that a vast inflow of savings from developing nations flowed into the mortgage market, driving the U.S. housing bubble. This pool of fixed income savings increased from around $ 35 trillion in 2000 to about $ 70 trillion by 2008. NPR explained this money came from various sources, "[b]ut
#407592