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Seven of the UK’s biggest housebuilders have agreed to pay a total of £100mn after an investigation by the competition regulator into information sharing between the companies.
The Competition and Markets Authority said on Wednesday that the companies had offered to make the payments after it unearthed evidence last year that commercially sensitive information, including on prices, had been transmitted between companies.
The seven housebuilders — Barratt Redrow, Bellway, Berkeley Group, Bloor Homes, Persimmon, Taylor Wimpey and Vistry — had “agreed to legally binding commitments which will prevent anti-competitive behaviour and promote industry-wide compliance”, the CMA said.
The commitments include working with industry groups to develop guidance on information sharing and an agreement to limit the types of details that can be transmitted between housebuilders, including the prices for which houses have been sold. The £100mn would be paid to affordable housing programmes across the UK, the CMA said.
The regulator launched its investigation after it found evidence of information sharing during a study last year into why Britain builds too few homes. The study concluded that factors including the UK’s “complex and unpredictable planning system” were to blame.
The exchanging of information by companies could “weaken competition” but was not “one of the main factors in the persistent under-delivery of homes”, the CMA said at the time.
The Labour government has pledged to build 1.5mn new homes in England during the current five-year parliament to address a housing crisis — an aim that relies on commercial housebuilders producing new supply. Official forecasts indicate that planning reforms will add 1.3mn net additional homes across the UK over the parliament, still short of Labour’s target.
The CMA will consult the public before deciding whether to proceed with the planned payments and commitments by the housebuilders. If they are accepted, it will no longer be necessary for the regulator to decide whether the housebuilders broke competition law, “allowing the investigation to conclude swiftly and benefits to be felt quickly”, the regulator said.
Sarah Cardell, chief executive of the CMA, said: “Housing is a critical sector for the UK economy and housing costs are a substantial part of people’s monthly spend, so it’s essential that competition works well. This keeps prices as low as possible and increases choice.”
The CMA did not make any formal finding of wrongdoing against the companies.
Barratt Redrow, Taylor Wimpey, Persimmon, Bellway and Vistry said in statements that their share of the proposed payment would be £29mn, £15.8mn, £15.2mn, £13.5mn and £12.8mn respectively.
The companies noted that there had been no finding or admission that they had broken competition law.
https://www.ft.com/content/a46d26fe-5db0-4d5b-9704-f0f45e3a40bd
