House-building investigation to target land banking and entry barriers


Following a six-month consultation, the competition regulatory body has outlined the specific areas it will examine within the house-building industry.

On the 28th of February this year, the Competition & Markets Authority (CMA) initiated a study on the house-building market. It sought input on its areas of focus and has now identified five key areas for investigation: land banks, planning rules, competition among builders, entry barriers, and estate management charges.

The CMA’s primary concern is that the housing market is not functioning optimally, leading to reduced quantity and quality of new homes.

The CMA intends to assess whether house-builders with large land holdings hinder competition or construction progress. It will also analyze how complex planning regulations and decision-making uncertainties impede new home construction, particularly for smaller housebuilders with limited resources.

Additionally, it will examine competition levels among house-builders in specific regions and the ability of small and medium-sized builders to compete in local markets. The CMA will also address concerns about obstacles faced by smaller builders and their unique challenges in the home construction process.

Furthermore, instances have arisen where newly developed housing estates over the last five years were not adopted by local authorities. This situation obliges homeowners to rely on private management companies for maintaining essential amenities like roads and street lighting.

The CMA plans to comprehensively investigate each of these issues and subsequently share updates on progress in the coming autumn. This will involve releasing working papers on topics such as estate management charges, land banks, and planning rules. Alongside this effort, the CMA is also conducting a separate investigation into the private rented housing market.

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