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Investigation into housebuilders: CMA Report identifies issues in the UK housebuilding

Investigation into housebuilders: CMA Report identifies issues in the UK housebuilding

The Competition and Markets Authority (CMA) has released a comprehensive report on the housebuilding market across England, Scotland, and Wales, identifying significant barriers to the delivery of new homes and initiating a new investigation into practices among major housebuilders.

  • Planning system and the limitations of speculative private development have seen too few homes built.

  • Concerns around estate management charges and the build quality of some new homes.

  • New Competition Act investigation opened into 8 housebuilders following evidence suggesting information sharing.

According to the CMA's findings, the housebuilding sector is hampered by a combination of an intricate and unpredictable planning system and the constraints of speculative private development. This combination has led to a chronic underproduction of homes, with the report noting that fewer than 250,000 homes were built last year across Great Britain, falling short of the 300,000 annual target set for England alone.

Sarah Cardell, Chief Executive of the CMA, highlighted the gravity of the situation, stating, "Housebuilding in Great Britain needs significant intervention so that enough good quality homes are delivered in the places that people need them." She further emphasized the need for a streamlined planning process and stronger consumer protections to improve both the quantity and quality of new housing developments.

The study also shed light on the issue of estate management charges, revealing that homeowners often face high and unclear costs for the upkeep of communal facilities. Moreover, the CMA raised concerns about the build quality of new homes, with a noticeable increase in the number of owners reporting snagging issues.

In response to evidence suggesting that eight major housebuilders may have been sharing commercially sensitive information, potentially affecting site build-outs and new home prices, the CMA has opened a Competition Act investigation. The housebuilders under scrutiny include Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey, and Vistry. The CMA clarified that it has not yet concluded whether competition law has been infringed.

The report advocates for a range of interventions to remedy the identified issues. Recommendations include requiring councils to adopt amenities on all new housing estates and introducing enhanced consumer protections for homeowners facing estate management charges. Additionally, the establishment of a New Homes Ombudsman and a unified mandatory consumer code is suggested to provide homeowners with a more effective means of addressing quality issues with homebuilders.

Addressing the planning system's complexities, the CMA suggests that local authorities should develop clear, consistent targets for new home construction, streamline planning processes, and adopt measures to encourage housebuilders to diversify the types and tenures of homes they build.

While the CMA's recommendations aim to address the immediate challenges facing the housebuilding market, the report acknowledges that more fundamental interventions may be necessary to meet Great Britain's housing needs fully. These could include increasing the role of non-speculative housebuilding traditionally led by local councils and housing associations.


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