Competition Watchdog to Investigate Homebuilding Market

THE HEAD OF THE Competition and Markets Authority (CMA) has written to the Government to tell them that they will be launching an investigation into the homebuilding market as a priority.

The market study into UK housebuilding has been prompted by Michael Gove, who wrote to the CMA to suggest a study last year.

Gove, who is the Secretary of State for Levelling Up, Housing and Communities has been working on getting house builders to agree to meet the bill to replace unsafe cladding on high rise buildings, following the Grenfell Tower disaster in 2017.

House builders were slow to fully commit to meeting the costs of cladding remediation by signing up to the government created pledge. In January 2022, Michael Gove warned that he would “take all steps necessary” to force the housebuilders to “live up to their responsibilities”.

Later last year, Michael Gove wrote to the CMA in May suggesting they might look into how the house building market operates for SMEs, offsite construction, the land market and planning system.

Homebuilding Market Investigation

Now, after a CMA board meeting, the organisation has decided to finalise the scope of their investigation into homebuilding across the UK, Sarah Cardell, the CMA’s Chief Executive states in a reply letter to Michael Gove.

Stating the CMA’s purpose: “to help people, businesses and the UK economy by promoting competitive markets and tackling unfair behaviour”, Sarah Cardell points to the watchdog’s work on leasehold terms and ground rent clauses in leasehold contracts. The CMA has secured thousands of refunds for leaseholders whose leases were often doubled without notice.

In her letter, Sarah Cardell says “a thriving, competitive homebuilding sector is a core foundation for delivering the homes people need”. As a core area of consumer spending, investigating homebuilding is central to the CMA’s remit, she says, and the Chief Executive notes “the Uk Government’s openness to recommendations in respect of this sector”.

The study is expected to start in the next few weeks and take up to a year to complete.


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