The UK competition watchdog has opened an investigation into eight housebuilders after it found evidence they may be sharing commercially sensitive information that could affect the price of homes.
The Competition Markets Authority (CMA) has unveiled its findings following a comprehensive year-long examination of the housebuilding sector spanning England, Scotland, and Wales. Notably, the report underscores shortcomings within the industry, spotlighting purported violations of the Competition Act attributed to eight leading UK housebuilders.
The CMA uncovered evidence suggesting the potential sharing of information among competing housebuilders, such as sales prices and details of buyer incentives. It said this behaviour “prevented and distorted” competition. It could influence decisions around pricing levels and the rates at which the companies built new homes, impacting new home list prices. While not deemed a primary factor in the under delivery of new homes, the CMA expresses apprehension over its potential to undermine market competition.
Consequently, the CMA has initiated a thorough investigation under the Competition Act 1998 into Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey, and Vistry. However, the CMA has yet to draw conclusions regarding any infringement of competition law at this juncture.
Key findings also attribute the persistent underdelivery of new homes to the complex and unpredictable planning system, together with the limitations of speculative private development.
The report highlighted concerns regarding estate management charges, where homeowners often encounter high and ambiguous fees for the upkeep of essential facilities like green spaces, roads and drainage. Quality issues in new housing have also surfaced, with a notable increase in snagging reports over the past decade.
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 – recommends streamlining the planning system and increasing 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.”
