Competition investigation launched into eight major housebuilders

The Competition and Markets Authority (CMA) has launched an investigation into eight housebuilders for suspected breaches of competition law.

The probe relates to concerns that the companies may have exchanged competitively sensitive information with other housebuilders, which could be influencing the build-out of sites and the prices of new homes.  

The eight housebuilders whose activities are being investigated are:

The investigation follows the publication of a report by the competition watchdog on the housebuilding market in Great Britain. This found that speculative private development – by which around 60% of houses built from 2021 to 2022 were delivered – in addition to complex and unpredictable planning rules, were responsible for the persistent underdelivery of homes.

The report also notes “a shortfall in current levels of housing provision”. Although the number of new homes has “increased significantly” since the 2007-2008 global financial crisis, it has not exceeded 250,000 per year at any point during this period. The government target was to build 300,000 new homes annually.

While the CMA does not consider housebuilders sharing sensitive information with competitors to be one of the main factors in the persistent underdelivery of homes, the watchdog is concerned that it may weaken competition in the market.

The CMA has not reached any conclusions at this stage as to whether or not competition law has been infringed.

The report also found substantial concerns about estate management charges and the quality of some new housing after the number of owners reporting snagging issues increased over the last 10 years.

The CMA said the sector “needs significant intervention” to ensure the quantity and quality of new homes is delivered.

CMA chief executive Sarah Cardell said: “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. 

“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.”