The CMA found that 60% of houses built in 2021 to 2022 were through speculative private development. Credit: C Dustin via Unsplash.

The UK’s Competition and Markets Authority (CMA) has concluded its housebuilding market study in Great Britain and released its final report.

The report highlighted a complex planning system and the limitations of speculative private development as key factors in the under-delivery of new homes.

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It also raised substantial concerns regarding estate management charges and the build quality of some new homes.

The report identified a shortfall in the number of homes built across England, Scotland, and Wales, with fewer than 250,000 homes constructed last year, falling short of the 300,000 target for England alone.

The CMA found that 60% of houses built in 2021 to 2022 were through speculative private development.

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This model allows builders to construct homes without predetermined buyers, offering market flexibility. However, this has widened the gap between market delivery and community needs.

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The planning systems in England, Scotland, and Wales have been criticised for producing unpredictable outcomes and lengthy navigation times before construction can commence.

Furthermore, the CMA evaluated more than a million plots of land held by housebuilders and concluded that land banking is more a symptom of the planning system and speculative development issues than a primary cause of the new home shortage.

During the study, the watchdog discovered evidence suggesting that some housebuilders might be sharing commercially sensitive information, potentially affecting competition.

As a result, the regulator has launched a Competition Act investigation into Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey, and Vistry.

The CMA is calling for significant intervention in the market, recommending that councils adopt amenities on new housing estates, enhance consumer protections for homeowners on privately managed estates, and establish a New Homes Ombudsman with a mandatory consumer code to address quality issues.

CMA chief executive Sarah Cardell said: “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.

“The CMA has also today opened a new investigation into the suspected sharing of commercially sensitive information by housebuilders which could be influencing the build-out of sites and the prices of new homes.

“While this issue is not one of the main drivers of the problems we’ve highlighted in our report, it is important we tackle anti-competitive behaviour if we find it.”