Seven of the UK’s largest housebuilders have agreed to pay a combined £100 million towards affordable housing schemes across the four nations following a Competition and Markets Authority (CMA) investigation into the exchange of commercially sensitive sales information.
The payment – the largest ever secured by the CMA through a commitments package – will be allocated by the UK government to affordable housing programmes, including the Affordable Homes Programme in England and equivalents in the devolved nations.
It is expected to help fund the delivery of hundreds of new homes for low-income families, first-time buyers and vulnerable groups.
The CMA identified evidence that the developers had been sharing information with one another
The CMA launched its investigation last year after concerns emerged during its wider study of the housebuilding market. It identified evidence that the developers had been sharing information with one another about sales prices, levels of buyer interest and buyer incentives – such as contributions to stamp duty or upgrades to kitchens – which the authority said risked weakening competition in the sector.
The seven companies – Barratt Redrow, Bellway, Berkeley Group, Bloor Homes, Persimmon, Taylor Wimpey and Vistry – have not admitted liability or wrongdoing. However, to address the CMA’s concerns and bring the investigation to a close without a formal finding of a breach of competition law, they have offered a package of legally binding commitments, which is now open to consultation until 24 July.
These commitments include a pledge not to share certain types of commercially sensitive information with competitors, and to work with the Home Builders Federation and Homes for Scotland to develop sector-wide guidance on acceptable practices.
COMPREHENSIVE STEPS
Sarah Cardell, chief executive of the CMA, said the outcome marked a significant step for the housing sector. “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,” she said.
“As a result of the CMA’s investigation, housebuilders are taking clear and comprehensive steps to ensure they comply with the law and don’t share competitively sensitive information with their rivals.”
She added that the £100 million payment would support communities across the country by helping to deliver affordable homes where they are most needed.
If the CMA accepts the commitments following the consultation period, the investigation will be formally closed, and the payments will be made within three months. This would avoid a drawn-out legal process and allow benefits to be delivered more swiftly.
The investigation initially involved eight developers, but the number was reduced following the merger of Barratt and Redrow in August 2024. The CMA has clarified that neither the Home Builders Federation nor Homes for Scotland were under investigation.
CLEAR MESSAGE
While the case stops short of a formal infringement decision under the Competition Act 1998, the CMA said it hoped the commitments would send a clear message to other sectors that the authority will act decisively where it suspects that competition is being undermined.
The payment follows earlier commitments secured by the CMA from pharmaceutical companies, but the £100 million agreement with housebuilders now stands as the highest ever financial sum obtained by the authority through such an undertaking.
