Some of the UK’s biggest housebuilders have agreed to contribute £100 million towards affordable housing initiatives as part of commitments made to the Competition and Markets Authority (CMA).
The agreement follows a CMA investigation into concerns that major housebuilders may have shared commercially sensitive information with one another.
While the companies have not admitted wrongdoing, and the CMA will not make a formal finding on whether competition law was broken, the outcome has prompted questions about what it could mean for people who bought new-build homes.
What’s the story?
Seven major firms, including household names like Barratt Redrow, Persimmon and Taylor Wimpey, have been under investigation by the CMA over concerns they may have shared commercially sensitive information.
This included information such as:
- Achieved selling prices
- Incentives offered to buyers
- Reservation and sales activity
- Customer demand.
Competition authorities are concerned that sharing this type of non-public information between competitors can reduce competition and potentially affect the prices consumers pay.
Rather than continuing the investigation, the housebuilders have agreed to legally binding commitments. These include restrictions on future information sharing, strengthened competition law compliance measures and a £100 million contribution towards affordable housing initiatives.
No admission. No legal finding
Despite agreeing to the commitments, the companies have not admitted wrongdoing.
The CMA will also not make a formal finding on whether competition law was broken, meaning the investigation will conclude without a legal decision on the allegations.
Speaking to the BBC, CMA Chief Executive Sarah Cardell said the commitments would help “bring hundreds more affordable homes to the UK market immediately”.
What could this mean for homebuyers?
The CMA’s investigation focused on competition concerns rather than compensation for individual homebuyers.
However, it raises wider questions about whether the alleged information sharing affected competition in the new-build housing market and whether buyers paid more than they otherwise would have.
Whether individual homebuyers could ultimately seek compensation is a separate question and would depend on any future legal action.
What happens next?
The firms being investigated by the CMA were:
- Barratt and Redrow (now Barratt Redrow)
- Bellway
- Berkeley
- Bloor Homes
- Persimmon
- Taylor Wimpey
- Vistry.
If a legal challenge arises from this, for example, if it turns out people did overpay, we’ll be ready to help.
We don’t know yet if a claim will go ahead. But if it does, we’ll make sure you’re the first to know.
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