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House-builders under scrutiny as CMA probes

2 Mar 23 The Competition & Markets Authority (CMA) has launched an investigation into the house-building sector.

The CMA probe has been sparked by concerns that developers are not building enough homes.

The market study into house-building will focus on four areas:

  • housing quality: looking at how builders are delivering the right sorts of homes that communities and buyers need – including the fairness of estate management fees charged for ‘unadopted’ roads and amenities
  • land management: examining whether the practice of ‘banking’ land before or after receiving planning permission is anti-competitive
  • local authority oversight: exploring how councils oversee the delivery of homes and how developers negotiate affordable home requirements
  • innovation: considering whether factors may be holding builders back from adopting new building techniques or moving towards more sustainable, net zero homes.

The study will also explore the issues faced by smaller, regional firms. It will look at England, Scotland and Wales but not Northern Ireland.

In a separate but related project, the CMA is also looking into consumer protection for those that rent their homes.  It wants to “shed light on the experience of renters and explore whether more could be done to help landlords and intermediaries to understand their obligations”.

CMA chief executive Sarah Cardell said: “The quality and cost of housing is one of the biggest issues facing the country. Over the last few years, the CMA delivered real change for leaseholders, with tens of thousands of homeowners receiving refunds after being overcharged unfair ground rents.

“With that work nearly finished, we’re now looking to probe in more detail two further areas – the housebuilding and the rental sectors.

“If there are competition issues holding back housebuilding in Britain then we need to find them. But we also need to be realistic that more competition alone won’t unlock a housebuilding boom.

“In the same vein, we want to explore the experiences people have of the rental sector and whether there are issues here that the CMA can help with.

“We will of course be guided by the evidence, but if we find competition or consumer protection concerns we are prepared to take the steps necessary to address them.”

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