The study identified concerns that, in some circumstances, homeowners are facing high and unclear charges for the management of facilities such as roads, drainage and green spaces. Concerns were also raised over the quality of some new housing with a significant number of “snagging” reports from owners over the last ten years.

The report also highlighted potential issues relating to transparency and customer service, with buyers often facing challenges in obtaining accurate information about their purchase.

The CMA is recommending a range of measures for government consideration, including streamlining the planning system, and improvements to consumer protection for homeowners on new and existing private estates.

The CMA reported ‘persistent shortfalls in the number of homes built across England, Scotland, and Wales’ (Picture: stock.adobe.com)

A separate investigation under the 1998 Competition Act into the suspected sharing of commercially sensitive information by certain housebuilders has been opened by the CMA.

The report follows a year-long market study where the CMA sought to examine the dynamics of the housebuilding market, identifying potential barriers to competition, and assessing the impact on consumers.

The CMA stated that “there are persistent shortfalls in the number of homes built across England, Scotland, and Wales, with less than 250,000 built last year across Great Britain, well below the 300,000-target for England alone.”

The market study reviewed “land banking” by developers – buying land as an investment, holding it for future use but making no specific plans for its development, and how planning rules influence competition and house supply.

Angelique Bret is a Partner, Pinsent Masons

It concluded land banking was more a “symptom” of the planning system issues the CMA had identified, rather than a primary reason for the shortage of new homes. The CMA found land banking did not significantly distort competition between housebuilders in delivering houses.

The CMA has made a range of recommendations to the Scottish, English and Welsh governments to help improve market outcomes. These include requiring councils to adopt amenities on all new housing estates, introducing enhanced consumer protections for homeowners on existing privately managed estates, and establishing a New Homes Ombudsman as soon as possible, and setting a single mandatory consumer code so homeowners can better pursue homebuilders over any quality issues they face.

The CMA report also sets out proposed options for consideration by governments to help address concerns with the planning system. For example, ensuring local authorities put in place local plans and are guided by clear, consistent targets that reflect the need for new homes in their area, streamlining planning systems to significantly increase the ability of housebuilders to begin work on new projects sooner, and introducing measures to increase the build-out of housing sites.

The CMA’s findings raise various consumer protection considerations relevant to developers and emphasise the need for consistency across the industry with firms urged to ensure homes meet safety, energy efficiency and durability requirements.

The CMA’s consumer protection enforcement powers will be substantially strengthened once the Digital Markets, Competition and Consumers Bill is passed by parliament. The changes will empower the CMA, across all industry sectors, to decide when consumer protection laws have been broken without resorting to court action, and it will be able to set fines at up to 10 per cent of a company’s global annual turnover for breaching consumer laws.

Angelique Bret is a Partner, Pinsent Masons

CMA reports lay the foundations for building more homes - Angelique Bret

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