CMA to launch review into home building and renting practices

The Competition and Markets Authority (CMA) has announced two separate studies to investigate the competitiveness of practices in the home building and private rental sectors.

The work has been sparked by widespread problems over housing availability and costs facing both buyers and renters. On home building, there are concerns that housebuilders are failing to deliver the volume of homes needed to meet demand in the UK at the necessary speed required. On renting, the CMA will launch a consumer protection project to ensure landlords and others involved in the rental sector understand and are meeting their obligations to tenants.

Sarah Cardell, Chief Executive of the CMA, explained:

“The quality and cost of housing is one of the biggest issues facing the country. Over the last few years, the CMA delivered real change for leaseholders, with tens of thousands of homeowners receiving refunds after being overcharged unfair ground rents.

“With that work nearly finished, we’re now looking to probe in more detail two further areas – the housebuilding and the rental sectors.

“If there are competition issues holding back housebuilding in Britain then we need to find them. But we also need to be realistic that more competition alone won’t unlock a housebuilding boom.

“In the same vein, we want to explore the experiences people have of the rental sector and whether there are issues here that the CMA can help with.

“We will of course be guided by the evidence, but if we find competition or consumer protection concerns we are prepared to take the steps necessary to address them.”

The CMA’s housebuilding study will consider four areas:

• housing quality, including whether homes meet buyer and community needs, and the fairness of estate management fees
• land management, and whether the practice of ‘banking’ land for development is anti-competitive
• how councils oversee the delivery of new homes and negotiate affordable housing provision
• factors holding back home builders from adopting new techniques and delivering more sustainable homes

A market study allows the CMA to use compulsory information-gathering powers to probe the entire market. As well as helping develop a deeper understanding of how and when housebuilders decide to deliver new homes and the interaction of that with local authority housing targets, the study will consider the issues faced by smaller, regional firms. The CMA has a statutory deadline for publishing the study of 27th February, 2024.

On renting, the CMA will undergo a period of stakeholder engagement to hear the experiences of tenants in the private rented sector, from finding a place to live through to the end of the tenancy and moving to a new property. The CMA will report on its initial findings and proposed next steps this summer.