Eight housebuilders under investigation by competition authority

The Competition and Markets Authority (CMA) is investigating eight housebuilders as a study of the UK residential building market suggested possible information sharing between the rival firms.

Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey, and Vistry may have shared commercially sensitive information with competitors, the CMA said. The investigation, under the Competition Act 1998, is expected to run until December.

“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,” the authority said in a statement. It added, “he CMA has not reached a view as to whether there is sufficient evidence of an infringement or infringements of competition law for it to issue a statement of objections to any party under investigation. Not all cases result in the CMA issuing a statement of objections.”

The suspicions arose during CMA study into underdelivery of new homes, which found concerns over unpredictable results from planning applications and underfunding of planning authorities, a reluctance to reduce new housing prices, lack of clarity over estate management charges and a lack of incentives for housebuilders to compete on quality.

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.”

She said the potential information sharing could influence build-outs 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.”