Let them know what you think!
The CMA have been investigating some of the big builders for cartel like activity around prices, incentives and anticompetitive sharing of information. They have announced that they plan to accept £100M funding towards the delivery of “affordable” housing and a promise to behave in future although of course they have done nothing wrong!
Suppose the promises are kept – how far does £100M go? 400 homes across the UK? A drop in the ocean and a small price for each builder to pay as they are clubbing together towards this effective “fine” – a small slap on the wrist in our view. One CEO’s bonus worth?
We are disappointed but not surprised that this government quango has bought into the prevailing ideology that these big corporations are needed for housing delivery, in spite of recommending less reliance on them in their own report. Subscribing to this flawed logic leads to appeasement and an outcome which is not going to offer anything to those consumers who have suffered detriment from these practices, which include miss selling of estate charges.
We say “get some teeth – break them up and compensate consumers”
There is an opportunity for us to say what we think of this proposal – it isn’t a structured consultation with set questions, and is by email with the subject “Case 51392 – Response to housebuilders proposed commitments” to housebuilders-consultation@cma.gov.uk
We would suggest you include:-
- That you are a house buyer affected by these practices
- You don’t trust that the developers will stick to their promises, they are only concerned about reputation where it may affect profitability
- The suggested sum is a tiny amount for that industry – a CEO’s retirement bonus.
- Most importantly how does the settlement help the market become less dominated by large speculative house builders as recommended in their own report of 2024?
- And how does it compensate for the inflated prices due to lack of competition?
- What is the definition of affordable housing? We think this term is too vague.
- We do not agree that £100M is a substantial sum. The estimated £8 billion extra profit from price fixing is! This estimate was calculated from UK stats on new build completions for the 10 year to end of 2024 which is just over 2 million. CMA’s study suggests large housebuilders deliver 40% and an estimated average overcharge of £10,000 per home.
Please don’t feel restricted by these suggestions, but do try to keep it polite. If you have any other things to add you would like to share, please comment on this post. Thanks!
The housing market is in crisis and it not only affects first time buyers, but also those looking to move to obtain more space. I bought a 3 bed semi in 2018, now I am married, a child of three years and one due in October, and a dog. My current home is not big enough and I still have 100k left on the mortgage. If I want to move up in size then realistically I am looking to spend 450k
300k mortgage and using 100k equity from my house sale and all my savings. My issue is that despite rinsing my savings and putting my family right at the edge of affordability and all its associated risks, I can only sell my house for what would be normal increase in house price (180k) which leaves me short and unable to move. My point is that the market is broken not just for first time buyers but also the squeezed middle. Homes, moving house and property have become unaffordable for most but the 1% whom are buying assets not homes.
Agree that the move towards homes being an asset for investment has driven prices up. It’s not the only area of life by any means – practically every thing has become a commodity to be traded.