CMA statement on housebuilding

Affordable housing set to benefit from £100 million following CMA probe

Consultation underway on payment by housebuilders and changes to how they handle sensitive information to address CMA's concerns.

·    Seven housebuilders have agreed to pay a total of £100 million to affordable housing programmes across all 4 nations following a CMA investigation

·    This is the largest payment secured by the CMA as part of a commitments package, which could fund hundreds of new homes - helping low-income households, first-time buyers and vulnerable people

·    The housebuilders have also agreed to legally binding commitments which will prevent anticompetitive behaviour and promote industry-wide compliance

The Competition and Markets Authority (CMA) launched an investigation last year following concerns that 7 housing developers - Barratt Redrow, Bellway, Berkeley Group, Bloor Homes, Persimmon, Taylor Wimpey and Vistry - exchanged details about sales including pricing, number of property viewings and incentives offered to buyers such as upgraded kitchens or stamp duty contributions.

The housebuilders have offered a package of commitments to address the CMA's concerns which it will now consult on until 24 July 2025. Under the proposed commitments, the 7 housebuilders will:

·    Make a combined £100 million payment - the largest secured through commitments from companies under investigation - which will be split between affordable housing programmes across all 4 nations.

·    Work with the Home Builders Federation and Homes for Scotland to develop industry-wide guidance on information sharing.

·    Agree not to share certain types of information with other housebuilders, including the prices houses have been sold for, except in limited circumstances.

If accepted, the commitments will become legally binding and mean that it is not necessary for the CMA to decide whether the housebuilders broke competition law - allowing the investigation to conclude swiftly and benefits to be felt quickly.

This payment will directly support the delivery of affordable housing across the UK, helping to fund hundreds of new homes for those who need them such as low-income households, first-time buyers and vulnerable people.

It is important that competition works well in the housebuilding market to keep prices fair, improve the quality of homes and support the delivery of essential infrastructure. This outcome sends a clear message to other companies that the CMA will take action where it has concerns that the law is being broken.

Sarah Cardell, Chief Executive at the CMA, said:

"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. This keeps prices as low as possible and increases choice.

"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.

"Alongside these measures, the housebuilders we investigated have agreed to pay £100 million towards affordable homes programmes, which will help communities up and down the country."

The CMA will now consult on the proposed commitments before deciding whether to accept them. Any payments will be made within 3 months once agreed. For more information, visit the investigation page.

Notes to editors:

1.   The CMA's investigation was launched following concerns identified during its housebuilding market study.

2.   Two of the housebuilders involved in the CMA's investigation - Barratt and Redrow - merged to form Barratt Redrow in August 2024. The original investigation involving 8 housebuilders was subsequently reduced to 7 to reflect this merger.

3.   The Parties do not admit any liability or wrongdoing for the conduct subject to investigation. Formal acceptance of the commitments would result in the CMA not continuing its investigation and not proceeding to a decision on whether the CA98 has been infringed. Any decision by the CMA to accept binding commitments will not include any statement as to whether or not the housebuilders' conduct has infringed the CA98.

4.   The UK government will allocate the payment to affordable homes programmes across all 4 nations, including giving funding directly to the devolved governments. For example, some funding will be given to the Affordable Homes Programme in England which is administered by Homes England. Registered bodies, such as housing associations, charities and local authorities, can bid for funds from the programmes to support the capital costs of building affordable homes for rent or sale.

5.   The Home Builders Federation and Homes for Scotland were not under investigation. The housebuilders have agreed to work with these industry associations to develop industry-wide guidance to help ensure that all businesses are clear on the types of information they cannot share with their competitors.  

6.   The CMA has previously secured commitments, including payments, from pharmaceutical companies Vifor Pharma and Aspen. The £100 million from housebuilders is the highest payment the CMA has secured through commitments.