The Competition and Markets Authority (CMA) highlights the urgent need for increased housebuilding and streamlined planning processes to address the chronic housing shortage in the UK, driving up prices.
Amidst a chronic housing shortage in the UK, the Competition and Markets Authority (CMA) has emphasized the critical need for British housebuilders to construct more high-quality homes, while urging the government to streamline the complex planning system to facilitate swift action.
“Housebuilding in Great Britain needs significant intervention so that enough good quality homes are delivered in the places that people need them,” stated Sarah Cardell, Chief Executive of the CMA.
The regulator’s year-long study also announced an investigation into whether housebuilders share commercially sensitive information, potentially impacting competition within the industry.
Major housebuilders in the UK, including Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey, and Vistry, are under scrutiny as the equity index of UK housebuilders experienced a 2% decline in early trading following the announcement.
While the Home Builders Federation declined to comment on the investigation, it welcomed the focus on the planning system, acknowledging it as a fundamental barrier to housing delivery.
Housing scarcity has long been a pressing political issue in the UK, with skyrocketing prices and rental costs leaving many younger generations unable to afford their own homes. The government’s pledge to deliver 1 million new homes by an anticipated upcoming election falls short of its target of constructing 300,000 net new homes per year in England by the mid-2020s.
With less than 250,000 homes built across England, Wales, and Scotland last year, the CMA underscores the urgency for reform. Britain’s opposition Labour Party has pledged to address the planning system, aiming for substantial changes.
Amidst rising interest rates and living costs, the housing sector faces additional challenges. While the CMA acknowledges that potential anti-competitive behavior among housebuilders is not the primary cause of market problems, it expresses concern over its impact on competition and housing prices.
As the housing crisis persists, collaborative efforts between housebuilders and the government are crucial to overcoming barriers and ensuring the provision of quality, affordable housing for all.
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