The Competition and Markets Authority (CMA) has identified “concerns” in the housebuilding industry causing them to take a closer look at both developers and parts of the housing market.
Housing Secretary Michael Gove wrote to the CMA last year urging it to investigate the sector and pointed out that it had been 14 years since the regulator looked into the industry.
The regulator wants to look at five areas in greater detail – including unadopted estates and land-banking. The CMA said it’s analysis showed that the builders land banks have “grown in recent years”, which it worries could be holding back smaller developers and limiting “their ability to compete effectively in the market”.
The chief executive of one big housebuilder accepted land banks have grown and stated that it was “only because so much land has been clogged up in the dysfunctional planning system”.
The other area of concern is estate management charges as “a significant number” of housing estates built over the past five years had not been adopted by the local authority.
The CMA will also continue to consult on the planning system, which it has been told is “complex”. The CMA’s initial report found that “at the national level, the housebuilding market does not appear to be particularly concentrated, with a number of large housebuilders competing alongside smaller, regional firms”.
Sarah Cardell, chief executive of the CMA, said the regulator alone “can’t resolve the problems in the UK housing market” – adding that it would recommend “legislative changes” to the government if it deemed necessary.
The CMA have also been looking at the rental market and said that although “many landlords and letting agents are providing good service,” its initial engagement found a small number not complying with consumer protection law.
Cardell said:
“These [issues] warrant further investigation and we stand ready to take enforcement action if needed. The CMA is taking action to provide updated guidance for lettings agents so that both tenants and landlords are really clear about their own rights and responsibilities.”
Responding to the news, Sam Rees, Senior Public Affairs Officer at RICS, said:
“RICS welcomes greater clarity, which this amendment in the Levelling-Up Bill provides and should help tackle planning backlogs – something RICS members have repeatedly referenced as a barrier in creating new homes. Overcoming these existing bottlenecks is crucial for meeting housebuilding targets, although we recognise that this cannot come at the detriment of the environment.
The UK needs further investment towards mitigation and treatment works in our waterways, as well as a push to build greener, more energy-efficient homes that significantly limits resulting pollution.”
