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Competition watchdog to launch review of housebuilding market

The UK’s competition watchdog has announced that its next market study will be a review of the housebuilding market.

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Picture: Getty
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The UK’s competition watchdog has announced that its next market study will be a review of the housebuilding market #UKhousing

In a letter to housing secretary Michael Gove, the Competition and Markets Authority’s (CMA) chief executive Sarah Cardell said the board had decided that homebuilding should be “prioritised as its next market study”.

Ms Cardell said that following the CMA’s recent investigation into the leasehold system, tackling unfair practices across the accommodation sector more broadly will be a “continued area of focus over the next 12 months”.


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The letter said: “The board considered proposals for a market study into homebuilding. They noted that there are many factors at play in delivering affordable, high-quality places to live in but agreed that a thriving, competitive homebuilding sector is a core foundation for delivering the homes people need.”

It comes after Mr Gove personally urged the CMA to undertake a review of the sector. In a letter to Ms Cardell in December, the housing secretary said that a study would be “timely” and that the government would welcome its recommendations.

Mr Gove said he was “delighted” about the CMA’s decision to launch a review.

He said: “Buying a home is one of the most important decisions that anyone will make, which is why having a market that works properly and fairly is vital.

“We want to deliver the homes communities need where they want them, and to do that we need a market that offers a level playing field, so smaller home builders get a look in, not just the big developers.”

The watchdog has already been looking into the housing sector and last summer concluded a three-year investigation into leasehold mis-selling and onerous ground rent charges.

The probe led Taylor Wimpey, one of the UK’s largest house builders, to remove terms from its leasehold contracts that cause ground rents to double in price every 10 years.

Ms Cardell’s letter added that further details, including the geographical scope of the study, will be sent to the board for approval “in the next few weeks”.

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