CMA Investigation: A Turning Point for the Housebuilding Industry?

The Competition and Markets Authority (CMA) has recently opened a further housebuilding investigation, this time into the conduct of eight prominent housebuilders in Great Britain.

This probe, initiated on 26 February 2024, follows on from the CMA’s more general housebuilding market study, and seeks to determine whether any of these particular companies have breached competition law by exchanging competitively sensitive information.

According to the CMA, it is scrutinising the eight housebuilders for potential anti-competitive practices that could have significantly impacted the market for housebuilding. The UK Government had a target of building over 300,000 homes annually in England alone; however, only 250,000 were built last year in the whole of the UK. While the CMA has already acknowledged there were a range of complex reasons behind this, such as the UK’s extensive planning regulations, and accepted that housebuilders are not routinely “landbanking” sites, its investigation indicated that the exchange of competitively sensitive information could have been a contributing factor to the industry failing to meet its targets and, in any event, would be a serious infringement of competition law in its own right if the CMA finds evidence proving wrongdoing.

As far as the CMA is concerned, its investigation underscores the importance of competition regulation in fostering a healthy housebuilding market, where businesses compete fairly and consumers benefit from a wide range of choices, i.e. there is a level playing field in the housebuilding industry.

If any of the CMA’s allegations are proved, the outcome of this investigation could lead to a shake-up in the industry, reinforcing the need for transparency and adherence to competition law regulation. As the case unfolds, stakeholders will be watching closely to see how it impacts the future of housebuilding in Great Britain.

Freeths LLP, known for its expertise in the housebuilding sector, stands ready to provide guidance and support to those in the housebuilding industry. The firm’s deep understanding of the sector, combined with its legal expertise and experience in providing both legal services to housebuilders and competition law representation to construction clients undergoing CMA scrutiny, including a settling party in the recent construction cartel investigation, makes Freeths a trusted partner in navigating the complex regulatory regime.

If you have any queries regarding the contents of this article please get in touch with Andrew Maxwell or Chloe Birkett.

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