The Competition and Markets Authority (CMA) has concluded its housebuilding market study across England, Scotland, and Wales.
As a result of the study, the CMA has opened an 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.
The CMA said: “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.”
Newspage asked brokers and property experts for their thoughts on this report, below.
Reaction:
Scott Taylor-Barr, principal adviser at Barnsdale Financial Management:
“Given that the new build housing market is effectively controlled by a small number of very large, national house builders, it would be incredibly damaging to find that they had been colluding with each other to maximise profits at the expense of the house buying public.
“Housing is a very emotive subject for most people in the UK and a very important driver of our economy, so to have it controlled by a relatively small group of very powerful businesses is bad enough.
“If it’s found that they have been working together to maximise their profits and defraud the public, then that is something that needs to be punished with the full force of the law.”
Ranald Mitchell, director at Charwin Private Clients:
“The Competition and Markets Authority (CMA) report exposes fundamental concerns within the housebuilding sector, particularly the disclosure of sensitive information between competitors. This warrants some serious scrutiny.
“These practices undermine the competitive integrity of the market and most likely impact affordability and availability in the housing sectors.
“We must question the ethics and legality of these actions, and urgent reforms are needed to restore a fair and competitive market place.”
Stephen Perkins, managing director at Yellow Brick Mortgages:
“This report from the CMA confirms what many in the country already knew: we are not building enough homes, the quality of homes being built is getting worse, with the the number of issues increasing and estate management charges are unfair to homeowners.
“It also confirms that current planning laws and systems are not fit for purpose.
“Stating the issues in a formal report is of course useful, but the lack of proposals to address them means that little will happen to bring positive change to this sector.”
Lewis Shaw, owner and mortgage expert at Shaw Financial Services:
“In other news, scientists have confirmed that water is wet. Is anyone surprised by this? Housing is a public good.
“If it’s solely left to purportedly free markets focused on share prices and profit to make decisions, what do people think will happen?”
Riz Malik, found and director at R3 Mortgages:
“Placing the progress of the UK’s new home construction projects in the hands of a limited number of developers is imprudent, considering their considerable sway, especially in light of Barratt’s recent proposal to acquire Redrow.
“However, this has been the case for many years. With the substantial government support that new home constructions have received and continue to benefit from, it’s crucial to meticulously examine any signs of collusion.”
Gary Bush, financial adviser at MortgageShop.com:
“A review into house builders is long overdue.”
Charles Breen, founder at Montgomery Financial:
“Simply put, this is profits over people. It’s the same old story when it comes to developers.”
Graham Cox, founder at Self Employed Mortgage Hub:
“The CMA’s report highlights suspected collusion between house builders, where they are effectively acting as a cartel to support property prices and thereby increase profits.
“Just another example of a rigged housing market that is ripping consumers off.
“The question is, will this Tory administration be brave enough to do anything about it, given they’re funded by the house builders?”
