CMA launches investigation into eight housebuilding firms

The Competition and Markets Authority (CMA) has stated that “significant intervention” is needed in the British housebuilding market, after it launched an investigation into eight firms.

The regulator has said that some housebuilders may be sharing commercially sensitive information between each other which “could be influencing the build-out of sites and the prices of new homes”.

Under the Competition Act 1998, Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey, and Vistry are set to be investigated.

The CMA has published its final report on the housebuilding market in Great Britain, which has found that the “complex and unpredictable planning system”, along with the limitations of speculative private development is “responsible for the persistent under delivery of new homes”.

A target was set for the delivery of 300,000 new homes across England in 2023. However, this figure reached less than 250,000 across England, Wales and Scotland.

The CMA found that the planning systems in these respective countries are “producing unpredictable results” and often take protracted amount of time for builders to navigate before construction can start.

Furthermore, the report found evidence which shows that private developers produce houses at a rate which they can be sold without needing to reduce their prices, rather than diversifying the types and numbers of homes they build to meet the needs of different communities, such as affordable housing.

The regulator said that it would like to see a housebuilding market that delivers more homes, particularly in the areas of highest demand; consistently better outcomes on new-build quality and reduced detriment to consumers arising from the private management of public amenities on new-build estates.

Chief executive at the CMA, Sarah Cardell, said: "Housebuilding in Great Britain needs significant intervention so that enough good quality homes are delivered in the places that people need them.

"Our report - which follows a year-long study - is recommending a streamlining of the planning system and increased consumer protections. If implemented, we would expect to see many more homes built each year, helping make homes more affordable. We would also expect to see fewer people paying estate management charges on new estates and the quality of new homes to increase. But even then, further action may be required to deliver the number of homes Great Britain needs in the places it needs them.

"The CMA has also today opened a new investigation into the suspected sharing of commercially sensitive information by housebuilders which could be influencing the build-out of sites and the prices of new homes. While this issue is not one of the main drivers of the problems we've highlighted in our report, it is important we tackle anti-competitive behaviour if we find it."

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