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Watchdog probes UK homebuilders for information sharing

Tan KW
Publish date: Mon, 26 Feb 2024, 07:32 PM
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Britain’s top antitrust enforcer has opened an investigation into eight housebuilders to probe potential information sharing.

The Competition and Markets Authority (CMA) has opened a cartel investigation into Barratt Developments plc, Bellway plc, the Berkeley Group, Bloor Homes Ltd, Persimmon plc, Redrow plc, Taylor Wimpey plc and Vistry Group plc. The investigation centres on concerns they may have exchanged competitively sensitive information, which could be influencing the build-out of sites and the prices of new homes. An initial information gathering stage will take place until December.

“It is important we tackle anti-competitive behaviour if we find it,” said Sarah Cardell, the chief executive officer of the CMA.

The watchdog spent the last year looking into the country’s chronic housing shortage. It found that the nation’s planning system, which it deemed complex and unpredictable, coupled with limitations of speculative private development were responsible for the persistent underdelivery of new houses. 

Barratt, Bellway, Berkeley, Persimmon, Redrow, Taylor Wimpey and Vistry all fell in early London trading on Monday. Persimmon fell as much as 3.7%. 

The study also found concerns about estate management charges and the quality of new homes. The CMA presented its findings in a letter addressed to levelling up secretary Michael Gove, outlining a number of recommendations, such as establishing a new homes ombudsman to help customers better pursue developers over quality issues.

The CMA announced its housebuilding market study in February last year, and said it would look into five areas of concern, focusing on estate management charges, land banks, planning rules, competition among builders, and barriers for new developers. Initial findings identified complex planning rules and slow decision-making as hindering the delivery of new homes, particularly for small homebuilders with fewer resources. 

The CMA’s market study powers help to examine if sectors are working properly for consumers. If significant problems are discovered, then the agency can open full-blown investigations that can lead to specific remedies imposed on businesses.

The shortage of affordable housing has become a key battleground for politicians, as the country readies for a UK-wide vote expected later this year. 

More than four years ago, the ruling Conservative Party pledged to build 300,000 new homes a year, a target they fell short of every year after, before making it advisory in 2022. The Labour Party, which is leading in the polls, effectively matched the objective by promising in October to build 1.5 million homes over five years, should it get into power. 

 


  - Bloomberg

 

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