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CMA right to blame planning system, say house-builders

26 Feb House-builders have welcomed confirmation from the competition watchdog that it is the planning process to blame for housing shortages, not the builders.

The Competition & Markets Authority (CMA) has today published the final report from its year-long house-building market study.

A decision by the CMA to launch an investigation into eight major house-builders suspected of sharing commercially sensitive information with their competitors has already attracted the main headlines, but it is what the report says on planning that has the builders most interested.

Since housing secretary Michael Gove unveiled his plans to weaken the National Planning Policy Framework last year, more than 65 local authorities across England have withdrawn their local plans. CMA chief executive Sarah Cardell has written to Gove suggesting that government “ensures local authorities put in place local plans and are guided by clear, consistent targets that reflect the need for new homes in their area”.

She also proposes that government considers streamlining the planning systems, increasing the capacity of council planning departments and introducing measures to increase the build-out of housing sites by incentivising builders to diversify the tenures and types of homes delivered.

She also recommends that the government requires councils to adopt amenities on all new housing estates and introduces enhanced consumer protections for homeowners on existing privately managed estates.

House-builders welcome all of this.

Steve Turner, executive director of the Home Builders Federation, said: ““The CMA report recognises the challenges the industry faces when looking to deliver homes.

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“We welcome recognition that the planning system is a fundamental barrier to delivery and adds unnecessary delay and cost into the development process, and the need for local authorities to have plans in place and properly resourced planning departments. We also welcome the CMAs recognition that house builders do not land bank unnecessarily, that supports a number of similar investigations over recent years.       

“We wholeheartedly support the recommendation that councils adopt and maintain the amenities housebuilders deliver as part of the development, which is what residents pay their council tax for. House-builders do not want to be long term mangers of estates and make absolutely no profit from the management companies that are required to be put in place.

“We are committed to working with the CMA and government to introduce their recommendations and ensuring we can create an environment within which we can deliver the homes the country needs.”

Rico Wojtulewicz, head of policy and market insight for the House Builders Association (HBA), which represents smaller building firms, said: “The CMA report has confirmed that a broken planning process is the reason we have a lack of social housing, why big builders build too many of our new homes and SMEs are shut out, that homes are in the wrong places and too expensive, there are some issues with quality, and we don’t do placemaking.

“None of this is new or uncontroversial but the UK needed this CMA report to keep hammering home the reality that politicians of all colours are the reason we have a housing and placemaking crisis. It’s time they stopped blaming builders and instead, were held accountable for the mess they have caused and keep causing.”

Richard Beresford, chief executive of the National Federation of Builders (NFB), said: “Planning should be enabling homes, better places and competition which benefits not just Britain, but the British consumer. The CMA has correctly identified that the UK planning system does the opposite.”

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