The UK’s competition authority is currently looking into eight companies that construct houses due to suspicions that they are exchanging confidential information.
The CMA initiated an investigation due to concerns that it may be impacting the growth of properties and costs of newly constructed homes.
The regulator issued a warning that the housebuilding industry requires significant intervention due to worries about the standard of newly constructed homes, unclear and high charges for estate management, and difficulties with planning.
Last February, the CMA initiated an investigation into the state of the housing construction industry and the private rental market.
In its final report released on Monday, it stated that the current planning system and restrictions on speculative private development have resulted in a shortage of new homes being constructed.
The report emphasized that there is a consistent lack of homes being built in England, Scotland, and Wales. In Great Britain, only 250,000 homes were built last year, falling short of the goal of 300,000.
The reason for this is partly due to the complicated and unpredictable planning regulations in all three countries, according to the statement.
The report points out that numerous planning departments lack sufficient resources, fail to maintain current local plans, and lack clear objectives or effective incentives to meet the necessary housing demand in their respective areas.
The report also mentioned that deficiencies were connected to the need to communicate with a diverse group of individuals.
Moreover, there were worries about restrictions on private speculative projects, revealing that developers tend to prioritize the cost of homes rather than creating a variety and quantity of housing to cater to the demands of local neighborhoods.
The study also discovered an increase in developers utilizing estate management fees for amenities such as roads, drainage, and parks.
The statement noted that these fees are frequently expensive and difficult for homeowners to understand, and cautioned that unexpected charges can add up to thousands of pounds.
There were concerns raised that builders lack strong motivation to prioritize high quality, and consumers have uncertain avenues for seeking redress when issues arise. The CMA also noted a rise in snagging problems.
The watchdog suggested establishing a new homes ombudsman to assist homeowners with issues regarding the quality of their homes. It also recommended that councils be responsible for maintaining amenities in all new housing developments.
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The CMA discovered evidence that certain housebuilders may be disclosing confidential information to their rivals, potentially impacting property values and reducing competition.
The inquiry will examine Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey, and Vistry. No definitive findings have been made regarding potential violations of the law.
According to Sarah Cardell, the CEO of CMA, there is a pressing need for significant intervention in the housebuilding sector in Great Britain in order to ensure an adequate supply of high-quality homes in areas where they are needed.
After conducting a year-long study, our report suggests streamlining the planning system and implementing stronger consumer protections.
If put into action, we anticipate an increase in the number of homes constructed annually, ultimately making housing more attainable.
Today, the CMA has launched an additional investigation regarding potential sharing of sensitive information by housebuilders, which may be affecting the development of sites and the costs of new homes.
Although this problem is not a primary factor contributing to the issues outlined in our report, it is crucial that we address any anti-competitive behavior we may encounter.
Source: theguardian.com
