The UK’s housing crisis has been in the spotlight for quite some time now. And it seems that the country’s biggest housebuilders may have played a role in exacerbating the situation. According to a recent probe conducted by the Competition and Markets Authority (CMA), eight major housebuilders are being investigated over concerns that they have been sharing confidential sales data, which could limit the supply of new homes and keep prices high.
The CMA’s year-long investigation has uncovered evidence suggesting that these developers have been sharing information that hampers the construction of new homes. Barratt, Bellway, Berkeley, Bloor Homes, Redrow, Persimmon, Taylor Wimpey, and Vistry are the companies currently under scrutiny. As news of the investigation broke, their shares dropped by an average of 2%.
While the CMA clarified that sharing information is not the primary driver of the housing shortage, it is still determined to tackle any anti-competitive behavior. The watchdog has the authority to levy fines of up to 10% of a company’s revenue if it finds evidence of competition reduction through the violation of laws.
The CMA also highlighted the fact that the UK heavily relies on these eight housebuilders, who account for 60% of new home construction. Developers are hesitant to build new homes if they fear they may face financial losses. For instance, Taylor Wimpey reported last year that it was building significantly fewer homes due to potential buyers struggling to afford mortgages.
In addition to investigating housebuilders, the CMA has urged the government to take substantial action to address fundamental concerns in the housing market. The watchdog also attributed the failure to meet housing targets to the UK’s complex and unpredictable planning system. It found that many planning departments lack clear targets, suffer from insufficient resources, and rely on outdated local data.
In 2023, only 250,000 homes were built, falling short of the government’s target of 300,000. The CMA discovered that poor planning was a significant factor contributing to this shortfall, leading to delayed construction and inadequate supply. To rectify this, the watchdog recommends that local councils take control of amenities on housing estates to prevent homeowners from facing high charges for issues like drainage. It also advocates for the establishment of an Ombudsman to handle cases related to the poor quality of new homes, such as collapsing staircases and ceilings.
It is crucial to address the housing crisis in the UK as it has far-reaching implications for the economy and society as a whole. The CMA’s investigation and subsequent recommendations aim to ensure fair competition and quality standards in the housing market. The government must act swiftly and decisively to bring about meaningful change and alleviate the burden on prospective homeowners. To stay updated on this issue and more, visit F5 Magazine.