Housebuilders investigated over suspected collusion to drive up prices
BRITAIN’S biggest housebuilders are under investigation for suspected illegal information sharing amid fears that collusion in the industry has pushed up prices.
The Competition and Markets Authority (CMA) yesterday announced an investigation into “suspected sharing of commercially sensitive information by housebuilders, which could be influencing the build-out of sites and the prices of new homes”.
Sarah Cardell, the chief executive of the CMA, said: “It is important we tackle anti-competitive behaviour if we find it.” The watchdog will investigate the practices of Barratt Developments, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey and Vistry.
Specifically, regulators will investigate whether developers have colluded on house prices, while also looking into the rate at which new homes are built and incentives offered to buyers, such as complimentary white goods.
The CMA has not reached any conclusions at this stage as to whether or not competition law has been infringed.
Shares fell on the news. Barratt lost 1.6pc yesterday, Persimmon was 2.3pc lower, Taylor Wimpey declined 3.1pc, Redrow dropped 2.4pc, Berkeley was 0.67pc lower and Bellway slipped 1.9pc.
The investigation follows a year-long study of the market to understand why too few homes are being built.
Ms Cardell said the inquiry had concluded the market “needs significant intervention so that enough good quality homes are delivered in the places that people need them”.
The CMA blamed the UK’S “complex and unpredictable planning system” and the “speculative” nature of private development for the “persistent under delivery of new homes”.
Fewer than 250,000 homes were built across the UK last year, far below the Government’s target of 300,000 annually in England alone. The CMA found that planning systems across Britain were unpredictable, with many councils under-resourced and several without an up-to-date local plan for housing.
The watchdog also raised concerns about the declining quality of many new houses. It said the number of minor issues with new builds was increasing, while “a substantial minority also experienced particularly serious problems with their new homes, such as collapsing staircases and ceilings”.
Michael Gove, the Housing Secretary, asked the CMA to investigate the market in 2022 to ensure it was operating effectively.
A Bellway spokesman said: “We are reviewing the CMA’S report. Bellway has engaged and co-operated fully with the CMA throughout its market study – and will continue to do so.”
A Redrow spokesman said: “Redrow has fully co-operated with the CMA throughout its market study. We remain focused on the delivery of high-quality and much-needed new homes.”
A Taylor Wimpey spokesman said: “Taylor Wimpey notes the investigation opened today and we will co-operate fully with the CMA in relation to this.”
Berkeley and Vistry declined to comment. Bloor Homes and Persimmon were contacted for comment.
A Housing Department spokesman said: “We welcome the CMA’S final report following its full market study into housebuilding and the report will be carefully considered. Despite the economic challenges we remain on track to build one million homes this parliament.” The Government will provide a formal response to the report within 90 days.