CMA report: Housebuilding market study in Great Britain

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The UK Competition and Markets Authority (“CMA”) recently published its final report for the housebuilding market study in England, Scotland and Wales (the "Report").
The CMA’s market study was prompted by concerns of under-delivery of new homes and wider concerns around the state of the housebuilding market. In 2022-2023, less than 250,000 houses were built across Great Britain, which is significantly below the UK government’s target to deliver 300,000 homes per year in England alone. As a result, the CMA faced calls from industry bodies, MPs and the Secretary of State for the Department of Levelling Up, Housing and Communities to look into the housebuilding market. The CMA launched its market study into the housebuilding sector in February 2023 and published the Report on 26 February 2024.
We cover some of the key findings and recommendations highlighted in the Report below.
Key findings
The CMA found that the housebuilding market is not working well for consumers as the number of houses being built is below government targets (and impacting affordability) and there are concerns about low levels of innovation and the quality of new build homes. The CMA found that the main drivers of these poor outcomes include:
Next steps
The CMA has made a number of recommendations to the government to help tackle the drivers of the poor market outcomes. These recommendations include (inter alia):
Separately, due to the wider policy trade-offs and complexities of reforming the planning systems, the CMA has proposed options for consideration rather than recommendations to government. These options include (among other things) more objective and effective use of targets to ensure housing need is met and streamlining the planning system to allow housebuilders to begin work sooner.
Ultimately, the CMA decided not to make a market investigation reference. However, as a result of the findings in relation to information sharing, on 26 February 2024 the CMA opened a new investigation into suspected breaches of competition law by eight housebuilders.
This post was co-written by Sandra Mapara and Tommy Yapp.
“Our report – which follows a year-long study – is recommending a streamlining of the planning system and increased consumer protections. If implemented, we would expect to see many more homes built each year, helping make homes more affordable. We would also expect to see fewer people paying estate management charges on new estates and the quality of new homes to increase. But even then, further action may be required to deliver the number of homes Great Britain needs in the places it needs them.” – Sarah Cardell, Chief Executive of the CMA
https://www.gov.uk/government/news/cma-finds-fundamental-concerns-in-housebuilding-market