The competition regulator has “identified concerns” in five areas of Britain’s housebuilding industry.
The Competition and Markets Authority has been gathering evidence for the past six months, after being asked to investigate by levelling up secretary Michael Gove.
Having consulted developers, homeowners and local authorities, the regulator wants to look at five areas in greater detail, including the planning system, land-banking, estate management charges on “unadopted estates”, as well as barriers to entry for new developers and competition among housebuilders.
CMA chief executive Sarah Cardell said: “We’ll press on with our investigation of the five areas that are the focus of our market study so that we can get to the bottom of any potential competition concerns. Once complete, we will consider what actions the CMA can take to tackle any concerns identified or whether there are more effective ways to deal with those concerns such as through recommendations to government for legislative change.”
Gove wrote to the CMA last year urging it to investigate the sector. He pointed out that it had been 14 years since the regulator looked into the industry, which he wanted to make sure “operates effectively to deliver the homes that people need”.
A letter to the secretary of state from Cardell said that there appeared to be sufficient evidence around land banking to warrant a ‘market investigation reference’, as its full investigations are known.
The letter said that it had “concerns about high or uncapped charges for owners” as a result of unadopted estates, concerns that land banks may be limiting competition or slowing
build-out rates, and concerns that “complex planning rules and uncertainty of decision making were hindering the delivery of new homes”.
Cardell said the CMA would conclude the market study by 27 February 2024 “at the latest”.
