CMA’s House-Building Sector Investigation: A Deep Dive into the Findings and Next Steps

.The UK housing market has faced significant challenges for decades, leaving consumers frustrated with affordability, quality, and supply issues. To address these concerns, the Competition and Markets Authority (CMA) launched an investigation into the house-building sector. After months of analysis, the CMA has now published its final report, outlining key findings and recommendations aimed at improving the sector.

When Did the CMA’s House-Building Sector Investigation Begin?

The investigation dates back to late 2022 and early 2023, when Sarah Cardell, Chief Executive of the CMA, engaged with government officials and stakeholders about conducting a market study into the house-building industry. The study was launched to assess the industry's challenges and provide policymakers with data-driven recommendations to improve market performance.

Key Findings: Why the UK Housing Market Continues to Struggle

The CMA’s final report highlights that the house-building market has consistently failed to meet consumer needs. The study identifies several major issues, including:

• Problems in the planning system that create bottlenecks for new developments.
• Challenges in the land market, making it difficult for new players to enter.
• House builders’ incentives and behaviours, which may contribute to restricted supply and limited diversity in housing options.

These factors have combined to create a market that struggles to deliver affordable, high-quality homes at the pace consumers need.

CMA’s Recommendations to Reform the House-Building Industry

To address the identified challenges, the CMA has put forward a series of recommendations falling into three key categories:

1. Addressing problem areas in market operations, such as planning inefficiencies and land access.
2. Considering wider policy interactions, particularly with planning reforms.
3. Exploring more fundamental changes that could improve housing market outcomes in the long term.

Planning, Land, and Builders: The Core Issues Identified by the CMA

Among the CMA’s detailed recommendations are the following:

• Appointment of councils to adopt amenities on new housing estates to ensure proper upkeep.
• Creating a New Home Ombudsman to tackle quality issues faced by homeowners.
• Streamlining the planning system to make the process faster and more efficient.
• Incentivising builders to diversify the types of homes and tenures available to meet consumer needs.

The CMA has urged governments in England, Wales, and Scotland to engage in discussions to implement these recommendations effectively.

New Investigations Begin: CMA Targets Anti-Competitive Practices in House-Building

Even as this market study concludes, the CMA has launched a fresh investigation into potential anti-competitive practices in the house-building sector. The focus of this new investigation is information-sharing between house builders, which could restrict competition and further harm consumers.