Yahoo Finance Housebuilders investigated by watchdog over price of new homes
The competition watchdog has launched an investigation into UK housebuilders over concerns that they are sharing commercially sensitive information to influence the price of new homes
The Competition and Markets Authority (CMA) announced an investigation under the Competition Act 1998 into Barratt (BDEV.L), Bellway (BWY.L), Berkeley (BKG.L), Bloor Homes, Persimmon (PSN.L), Redrow (RDW.L) Taylor Wimpey (TW.L), and Vistry (VTY.L), having seen evidence that some housebuilders may be sharing information which could weaken competition in the housing market
It said it had “found evidence during the study which indicated some housebuilders may be sharing commercially sensitive information with their competitors, which could be influencing the build-out of sites and the prices of new homes”.
The CMA launched the probe after a year-long investigation into housebuilding in England, Wales and Scotland.
It also said in its report that "significant intervention" in the market was needed to ensure enough homes were built to meet demand. The watchdog also raised concerns over the quality of new homes.
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According to the report, there are "persistent shortfalls" in the number of homes built across England, Scotland and Wales, with less than 250,000 created last year.
This falls below the 300,000 target for England alone.
The CMA said that the "speculative approach to building" alongside "complex and unpredictable planning rules" have been responsible for the lack of new homes.
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.
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"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 report also found a rise in developers using estate management charges for facilities, such as roads, drainage and green spaces.
It said these charges are “often high and unclear to homeowners” and flagged that some unplanned charges can cost thousands of pounds.
The watchdog said it is recommending the government sets up a New Homes ombudsman to support homeowners over quality issues and requirements for councils to take over amenities on all new housing estates.
Housebuilding companies listed on the London Stock Exchange saw their share prices fall in early trading. Persimmon shares fell by 1.3%, closely followed by Taylor Wimpey, down 1.1%.
Watch: Investigation launched into eight homebuilders after 'persistent under delivery' of new houses
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