The Competition and Markets Authority (CMA) has published its final report on the housebuilding market in Great Britain today, and it makes for daming reading for the sector.
The investigation was launched after concerns were raised about competition in the housebuilding sector and the country’s inability to meet rising demand for new homes.
The year-long study identified a number of issues with the market, including complex planning regulations holding back housebuilding, poor quality of homes constructed and high estate management charges.
The regulator also found land banking issues with builders was: “More a symptom of the issues identified with the complex planning system and speculative private development, rather than it being a primary reason for the shortage of new homes.”
The report said around 60 per cent of all houses built in the years 2021 to 2022 were delivered by “speculative private development” and the country’s reliance on this model had “seen the gap widen considerably between what the market will deliver and what communities need.”
Sarah Cardell, chief executive of the CMA, said: “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 said it believed the housebuilding market in the country needed “significant intervention” to help meet housing targets and produce much-needed homes.
It also said it had 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.”
It added that it did not believe this sharing of commercially sensitive information was one of the main drivers holding back housebuilding, but the CMA noted it was “important we tackle anti-competitive behaviour if we find it.”
This is a developing story and City A.M. will update throughout the day….