CMA opens double probe into housebuilding and rented sector – Mortgage Strategy
The Competition and Markets Authority has launched an investigation into housebuilding — and will separately begin a study into consumer rights for tenants.
The watchdog says its probe comes after “concerns that builders are not delivering the homes people need at sufficient scale or speed”.
It adds that its inquiry into the rented sector “will seek to shed light on the experience of renters and explore whether more could be done to help landlords and intermediaries to understand their obligations”.
The move also follows an exchange of letters, released in December, between Michael Gove and CMA chief executive Sarah Cardell where he pressed the body for an investigation into the sector.
The CMA’s Cardell now says: “The quality and cost of housing is one of the biggest issues facing the country.
“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.
“In the same vein, we want to explore the experiences people have of the rental sector and whether there are issues here that the CMA can help with.
“We will of course be guided by the evidence, but if we find competition or consumer protection concerns we are prepared to take the steps necessary to address them.”
In December, a letter was released from Department for Levelling Up, Housing and Communities Secretary of State Gove to the CMA, where he reiterated his support for a study into the housing industry.
Gove wrote: “It is critical that we have a housebuilding sector that operates effectively to deliver the homes that people need.
“Housing plays a key role in achieving our Levelling Up ambitions. Buying a home is one of the most important decisions a family takes, with huge financial implications, so making sure this market is working in the interests of consumers is of the highest importance.”
He added the last housebuilding market study took place 14 years ago, and since then the market and the country faced “significant changes”, such as net zero, the altered structure of the market following the financial crisis and changing demographic trends.
Cardell replied that the regulator has been “developing proposals for work in this area”, adding that a decision on whether a year-long probe would go forward would be taken at its January board meeting.
Those letters, originally exchanged in November, were published in December on the same day as Gove was forced to tell a number of Conservative MPs the government’s 300,000 homes a year target was a “starting point” and would be “advisory” rather than mandatory.
That move came after a Commons vote on the Levelling Up and Regeneration Bill had to be dropped in November after 60 Tory MPs signed an amendment calling for the target to be scrapped.