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CMA to examine affordable housing supply as part of new housebuilding probe
The UK’s competition watchdog has kicked off new investigations into the housebuilding and private rented sector (PRS), which will include looking at affordable housing supply.
The 12-month market study into housebuilding will look at the “constraints” on the supply of new homes and whether market “distortions” – due to a lack of competition in the market – are harming consumers.
Plans for the probe were flagged by the Competition and Markets Authority (CMA) last month in a letter to housing secretary Michael Gove.
Sarah Cardell, chief executive of the CMA, said: “If there are competition issues holding back housebuilding in Britain then we need to find them. But we also need to be realistic that more competition alone won’t unlock a housebuilding boom.”
Among the areas the study will look at will be how councils “oversee the delivery of homes and how developers negotiate affordable home requirements”, the CMA said.
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As part of its latest attempt at planning reform, the government is proposing to scrap Section 106 agreements in favour of a national Infrastructure Levy.
However, the plan in its current form is opposed by a string of housing bodies, including the National Housing Federation and the Chartered Institute of Housing.
The study will also look at the controversial practice of landbanking, which was the subject of a previous inquiry by Conservative Party grandee Sir Oliver Letwin. Sir Oliver’s 2018 review found no evidence of the practice, which it is suggested involves developers buying land to sit on and see its value rise.
For the CMA’s review, evidence must be submitted by 20 March, while the CMA has until 28 August to decide if it wants to push ahead with a full market investigation. It will publish its market study by 27 February 2024.
Meanwhile, the CMA said that a separate consumer protection project on the PRS will look at “the end-to-end experience” from a tenant’s perspective including finding somewhere to live, renting a property and moving home.
It will also “examine the relationship between tenants and landlords and the role of intermediaries, such as letting agents”, the CMA said.
The agency said it will report on its initial findings and “proposed next steps” this summer.
Separately, the government is aiming to help private tenants and has promised to introduce its long-awaited Renters’ Reform Bill to parliament by May.
