CMA
intends to launch a market study into house-building
The
Competition and Markets Authority has informed the Secretary of State at the
Department for Levelling Up, Housing and Communities, that it intends to launch
a market study into the housebuilding sector.
Market
studies are industry wide probes where there are concerns that markets may not
be working as well as they should but where the problem does not appear to be
related to unlawful action by individual companies. However, they can result in remedies that are
intrusive, including changes in legislation or a wider market investigation.
The
CMA has been conducting consumer work in relation to unfair practices connected
with leasehold homes. It expects that
the promotion of competition in the accommodation sector will be a focus area over
the next year.
The
CMA considers that a market study into the housebuilding sector will be core to
securing the right environment for delivering homes to people in need.
The
proposed market study is aligned with the CMA’s goal to "consistently
focus action on the core areas of consumer spending and time" as set out
in the CMA's draft Annual Plan 2023/24.
The
CMA’s focus for its market study is not surprising against the backdrop of the
cost-living crisis and its work on consumer protection. It also aligns with the government's support
for the CMA's consideration of a market study in the housebuilding sector set
out in the Secretary of State’s letters of May and November 2022.
It
is expected that a formal proposal to launch a market study will be put to the
CMA Board in the coming weeks. Meanwhile,
builders and providers to the housebuilding sector and other interest groups
including advisers to consumers will want to follow these developments to
determine where their interests lie and how they can engage with the study.
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