UK competition watchdog to investigate 8 major UK housebuilders

News of the launch of an investigation came as the Competition and Markets Authority (CMA) concluded a study into the housebuilding market in England, Scotland and Wales.

The CMA said that during the study it had found evidence “which indicated some housebuilders may be sharing commercially sensitive information with their competitors”. That could have influenced the build-out of sites and the prices of new homes it claimed.

The CMA’s investigation under the Competition Act 1998 involves eight housebuilders:

• Barratt
• Bellway
• Berkeley
• Bloor Homes
• Persimmon
• Redrow
• Taylor Wimpey
• Vistry

The CMA stressed that it has not reached any conclusions at this stage as to whether or not competition law has been infringed.

It added, “While the CMA does not consider such sharing of information to be one of the main factors in the persistent under-delivery of homes, the CMA is concerned that it may weaken competition in the market.”

‘Substantial intervention’ in housebuilding market recommended

Meanwhile, following its market study, the CMA recommended a “substantial intervention” by the government in the UK housebuilding market after uncovering “fundamental concerns” about how it operates currently.

Great Britain saw fewer than 250,000 homes built last year, which is below the target of 300,000 for England alone.

The report found that Britain’s planning system is “complex and unpredictable” and that this, combined with the limitations of speculative private development, is responsible for persistent under-delivery.

It also found concerns with the quality of some new housing, after the number of owners reporting snagging issues increased over the last 10 years.

And it raised concerns about estate management charges, with home owners often facing “high and unclear” charges for management of roads, drainage and green spaces.

Sarah Cardell, chief executive of the CMA, 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.”