The UK competition watchdog has said it will probe land banking by the country’s biggest housebuilders as it identified a number of concerns regarding the sector.
The Competition and Markets Authority (CMA) formally started a probe into the housebuilding sector and the private rental market in February.
It said it was looking into the housebuilding industry amid worries that developers were not delivering homes at an adequate pace or scale.
On Friday, the CMA outlined five main areas it is investigating in relation to UK housebuilding.
We’ve updated 2 pieces of work in the housing sector:
➡️ our consumer protection project on issues in the private #rental sector
➡️ our market study probing competition concerns in #housebuilding
Read more: https://t.co/00w3V4BC1d pic.twitter.com/Kq73B5LkeY
— Competition & Markets Authority (@CMAgovUK) August 25, 2023
It said this will include estate management charges, where homeowners pay private companies to maintain things such as parks and roads.
The regulator will also look at issues regarding land banks, amid concerns over whether some large portfolios held by bigger firms are slowing competition or housing availability in some areas.
It is also looking into wider concerns regarding planning rules, competition between builders and barriers for new businesses wanting to build homes.
In relation to the rental market, the CMA said it was taking action to provide updated guidance for letting agents regarding the rights and responsibilities of tenants and landlords.
The CMA also identified concerns related to zero deposit schemes, sham licences, onerous guarantee clauses, and possible unlawful discrimination.
It said it will investigate further and will take enforcement action if needed.
Sarah Cardell, chief executive of the CMA, said: “The CMA alone can’t resolve the problems in the UK housing market.
“But we have a role to play and will do our part to help ensure the private rental and housebuilding markets work better for people and businesses.
“In housebuilding, we’ll press on with our investigation of the five areas that are the focus of our market study so that we can get to the bottom of any potential competition concerns.
“Once complete, we will consider what actions the CMA can take to tackle any concerns identified or whether there are more effective ways to deal with those concerns such as through recommendations to Government for legislative change.”
