Several large house building firms are being investigated by the Competition and Market Authority (CMA) after a report revealed evidence that suggested that “information sharing” had been taking place between building firms. The CMA revealed concerns that this was potentially in conflict with competition law, and confirmed that further investigation was needed.
Sharing information can have an impact on how many new homes are built and that mount for which houses are being sold. Between 2022-2023, fewer than 250,000 new homes were built across the whole of the UK, less than the “300,000” target for England alone. This, along with concerns over build quality, has led the CMA to suggest that serious issues exist that must be addressed.
Concerns were also raised over the fees paid to private estate management companies for the upkeep of public amenities such as roads, open spaces, and sewers, which were charged at up to £1,000 per annum. Whilst homeowners were generally made aware of the fees, the long-term implications and potential effect on reselling were not made clear. Effectively, this means that some homeowners are paying for both council tax and private estate management. The CMA also found that, in some cases, more of the management fees charged went to fees that to actual maintenance work.
The CMA included a list of proposals for the government to help tackle some of these issues. These proposals include implementation of common adoptable standards for public amenities on new housing estates and the mandatory adoption of public amenities by local government, as well as advanced consumer protections for new build buyers.
The CMA’s announcement caused a slight drop in share prices for several big house builders, with Taylor Wimpy shares down 2.6% on the day of the announcement.
Those house builders potentially implicated in the report are Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey, and Vistry. The CMA has not suggested that any laws have been broken.