The UK’s biggest housebuilders are set to pay a record sum to fund affordable housing after the competition regulator investigated sensitive information sharing among the firms.
A total of £100m, paid for by seven companies, will go to affordable housing programmes across England, Scotland, Wales and Northern Ireland, following a Competition and Markets Authority (CMA) investigation.
The inquiry was launched last year due to concerns that the companies were sharing commercially sensitive information, which could influence the prices of new homes.
There was concern that the housebuilders – Barratt Redrow, Bellway, Berkeley Group, Bloor Homes, Persimmon, Taylor Wimpey and Vistry – exchanged details about property sales, including pricing, viewing numbers and buyer incentives such as upgraded kitchens or stamp duty contributions.
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It’s resulted in an agreement to make the combined £100m payment – the largest secured via a commitment from companies under CMA investigation. Hundreds of new homes could be funded with the money, the CMA said, helping low-income households, first-time buyers and vulnerable people.
The businesses have voluntarily agreed to pay the sum and have not acknowledged wrongdoing. No finding of rule-breaking or illegality has been made.
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They have also offered to sign up to legally binding commitments to prevent anticompetitive behaviour.
Among the proposals advanced by the companies was an agreement not to share some information, like prices houses were sold for, with other housebuilders, except in limited circumstances, and to work with the Home Builders Federation and Homes for Scotland to develop industry-wide guidance on information sharing.
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The CMA has said it will consult on the changes.
If accepted, the commitments will become legally binding, and the CMA will not need to decide whether the housebuilders broke competition law.
Initially, eight companies were under investigation, but following a merger of Barratt Homes and Redrow, the number became seven.
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“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,” the CMA chief executive, Sarah Cardell, said.
