The UK’s Competition and Markets Authority (CMA) is launching a deeper probe into the practices of the biggest homebuilders and their high charges associated with handing over house estates to local authorities.
CMA CEO Sarah Cardell said “We’ll press on with our investigation so that we can get to the bottom of any potential competition concerns,” as they single out five particular areas of concern that need further investigation; estate management charges, land banks, and the large amount of developable land controlled by the biggest housebuilders, that may be limiting competition and slowing build-out rates in some areas.
The UK housebuilders’ index (FTNMX402020) has decreased 12% in the last year, raising concerns that such practices may be worse for competition. As local authorities are unable to access this land from the developers, they are unable to approve and bring to fruition projects that would benefit local communities.
The CMA investigation will reveal how widespread the issue of high charges for handing over house estates is, as well as gage the rate of development from the large developers. Communities are demanding answers as to the stalemates of certain projects and the slow rate at which development is taking place.
The CMA’s investigation is a positive step in addressing communication between developers and local authorities, and ensuring community development projects are allowed to take place, and that the housing stock is increasing at appropriate rates.
Source: BNN Bloomberg