Posted: Mon 26th Feb 2024

Deeside based Redrow among eight of the UK’s leading house builders facing competition probe

News and Info from Deeside, Flintshire, North Wales

The Competition and Markets Authority (CMA) has launched an investigation into eight of the UK’s leading house builders including Deeside-based Redrow.

The probe aims to uncover whether there have been breaches of competition law, particularly focusing on the suspected sharing of commercially sensitive information among competitors, which may be influencing the pace of development and housing prices.

As well as Redrow other housebuilders under scrutiny include Barratt Developments, Bellway, The Berkeley Group, Bloor Homes, Persimmon, Taylor Wimpey, and Vistry Group.

Sarah Cardell, CMA Chief Executive, expressed the importance of addressing any anti-competitive behaviour discovered during their investigation, despite it not being the main focus of their initial housing market study.

This investigation follows a detailed report by the CMA that highlighted several systemic issues contributing to the persistent under delivery of new homes in Britain.

In its report, the CMA found that the complex and unpredictable planning system in planning systems in Wales England and Scotland, together with the limitations of speculative private development, is responsible for the persistent under delivery of new homes.

The study also found substantial concerns about estate management charges – with homeowners often facing high and unclear charges for the management of facilities such as roads, drainage, and green spaces.

Concerns have been found, too, with the quality of some new housing after the number of owners reporting snagging issues increased over the last 10 years.

Additionally, the CMA’s assessment of over a million plots of land revealed that land banking—where developers buy land for future development—is more a symptom of the complex planning system and speculative development issues, rather than a primary cause of new home shortages.

To combat these issues, the CMA is advocating for a series of interventions, including the establishment of a New Homes Ombudsman and the introduction of enhanced consumer protections for homeowners on privately managed estates.

Sarah Cardell, Chief Executive of the CMA, said:

“Housebuilding in Great Britain needs significant intervention so that enough good quality homes are delivered in the places that people need them.

“Our report – which follows a year-long study – is recommending a streamlining of the planning system and increased consumer protections. If implemented, we would expect to see many more homes built each year, helping make homes more affordable.

“We would also expect to see fewer people paying estate management charges on new estates and the quality of new homes to increase.

“But even then, further action may be required to deliver the number of homes Great Britain needs in the places it needs them.

“The CMA has also today opened a new investigation into the suspected sharing of commercially sensitive information by housebuilders which could be influencing the build-out of sites and the prices of new homes.

“While this issue is not one of the main drivers of the problems we’ve highlighted in our report, it is important we tackle anti-competitive behaviour if we find it.”

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