The CMA’s Housebuilding Report

After publishing their final report on the housebuilding market, the CMA discovered that the unpredictable and complex planning systems, coupled with the speculative private development limitations, were responsible for the drop in delivery of new homes.

Housebuilders such as Berkeley, Taylor Wimpey, and Persimmon, to name a few, are currently under investigation, with no conclusions to date regarding the sharing of sensitive information that may have played a part in influencing sales prices.

The report identifies several key issues within the housing development sector, such as:

Planning Rules:

  • Builders face lengthy wait times and processes when navigating the rules before construction can even get started due to a lack of resources in planning authorities and next to zero incentives to meet the housing targets set by the UK government.

Speculative Private Development:

  • Private developers prioritise building homes that can sell at current market rates rather than diversifying to meet various communities’ needs, such as affordable housing.

Land Banks:

  • Developers ‘banking land’ exacerbates planning and speculative development issues but is not the primary cause of the housing shortage; it is merely a symptom of a poor and prolonged planning process.

Private Estate Management:

  • An increased number of estates are being built utilising privately managed amenities, which leads to concerns regarding hidden charges, inadequate information being shared and inadequate management.

Quality:

  • There has been a growing number of snagging issues being reported by homeowners, alongside consumers needing more precise routes for addressing these issues, seeming to show a lack of motivation for delivering high quality homes from the outset.

Sarah Cardell, Chief Executive of the CMA, 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. 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.”

Stewart Baseley, Executive Chairman of the Home Builders Federation, commented: “The CMA report recognises the challenges the industry faces when looking to deliver homes.

We welcome recognition that the planning system is a fundamental barrier to delivery and adds unnecessary delay and cost into the development process, and the need for local authorities to have plans in place and properly resourced planning departments. We also welcome the CMA’s recognition that housebuilders do not land bank unnecessarily. That supports a number of similar investigations over recent years.”