CMA to look further into housebuilding market

The Competition and Markets Authority has announced it is to in look “in greater detail” at five areas of the housebuilding market as part of its study into the sector which began in February.

The five areas are:

• Estate management charges

• Land banks

• Planning rules

• Competition between builders

• Barriers for new businesses wanting to build homes

On land banks, the CMA says that there are concerns that the fact that large builders own “large swathes of land” may be “limiting competition or slowing build-out rates in some areas”.

On planning rules the CMA has identified concerns that complex planning rules and uncertainty of decision making are hindering the delivery of new homes – particularly for smaller housebuilders.

The CMA says that the market study has found that, at the national level, the housebuilding market does not appear to be particularly concentrated, with a number of large housebuilders competing alongside smaller, regional firms. The CMA is now considering the number of competitors in particular areas and the extent to which small and medium sized housebuilders are able to compete in these local markets.

It also going to look at the barriers facing SMEs wanting to build homes.

And finally on estate management charges, CMA says …