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House-building probe to focus on land banking and barriers to entry

25 Aug 23 After a six-month consultation, the competition watchdog has set out the scope of its investigations into the house-building sector.

The Competition & Markets Authority (CMA) launched its house-building market study on 28th February this year with a call for views on what it issues should concentrate.

After receiving feedback from house-builders, planning authorities, campaign groups and others, the CMA has now set out the five areas on which it will focus: land banks,  planning rules, competition between builders, barriers to entry and estate management charges.

The CMA is concerned that both the quantity and quality of new homes are compromised by the market not working as it should or could.

The CMA said that it will explore whether house-builders holding large swathes of land impaired competition or slowed build-out rates. It will look at whether complex planning rules and uncertainty of decision making are hindering the delivery of new homes – particularly for smaller housebuilders that have less resources to help manage the planning process. It will look at the number of house-building competitors in particular areas and the extent to which small and medium-sized housebuilders are able to compete in these local markets.

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The CMA will look further at concerns it has heard about barriers facing small and medium-sized builders and the particular issues they face when delivering new homes.

It also says that there is evidence of new housing estates built over the last five years not being adopted by their local authority, leaving homeowners required to pay a private management company to maintain amenities such as roads and street lighting.

The CMA intends to investigate each of these issues further and provide updates on its work later in the autumn. This will include publishing working papers on estate management charges, land banks and planning rules.

It is also running a simultaneous investigation into the private rented housing market.

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