Watchdog launches investigation into housebuilding competition market

An investigation into eight housebuilders has been launched, over fears that the sharing of commercially sensitive information is weakening competition in the market.

The Competition and Markets Authority (CMA) is looking into Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey, and Vistry, to see if information shared between the competitors is influencing the build-out of sites and the prices of new homes.

The watchdog’s CEO Sarah Cardell does note that whilst this is not one of the main reasons for the “persistent under delivery of homes” the CMA will “tackle anti-competitive behaviour if we find it”.

A final report has been released on Great Britain’s housing market, with the CMA finding a “complex and unpredictable planning system” alongside “limitations of speculative private development”, is responsible for the “persistent under delivery of new homes”.

Concerns were raised about estate management charges, with homeowners often facing high and unclear charges for the management of facilities such as roads, drainage, and green spaces. The CMA found a growing trend by developers to build estates with privately managed public amenities – with 80% of new homes sold by the eleven biggest builders in 2021 to 2022 subject to estate management charges.

The study also found that the quality of some new housing has reduced, with the number of snagging issues increasing over the last ten years.

Recommendations are being made to the Government which include the creation of a New Homes Ombudsman “as soon as possible” and setting a mandatory consumer code so homeowners can better pursue homebuilders over any quality issues. It advises that councils should adopt amenities on new housing estates and wants enhanced consumer protections for homeowners on existing privately managed estates.

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”.