Housebuilders Pay £100m to Resolve Competition Probe

Britain’s leading housebuilders have collectively agreed to pay £100 million towards the development of affordable homes, a move designed to avert a definitive decision from the Competition and Markets Authority (CMA) regarding potential breaches of competition law. This significant settlement also includes an agreement from the seven involved firms not to share sensitive commercial information, such as detailed sales data and buyer incentives, except under strictly defined circumstances. The CMA had initiated an investigation last year into allegations that housebuilders were engaged in information swapping, which could include pricing strategies and the types of incentives offered to potential buyers, such as upgraded kitchens or contributions towards stamp duty.

The majority of the housebuilders involved have expressed their welcome for the CMA’s decision, emphasizing that the £100 million payment does not constitute an admission of any wrongdoing. The CMA has, in turn, launched a public consultation on these proposed commitments. If the commitments are accepted, the regulator stated it would not be necessary to determine whether the housebuilders had indeed violated competition law.

The companies under scrutiny by the CMA include Barratt and Redrow (who have since merged to form Barratt Redrow), alongside Bellway, Berkeley, Bloor Homes, Persimmon, Taylor Wimpey, and Vistry. While the CMA has declined to comment specifically on whether commercially sensitive information like sale prices was exchanged between these firms, potentially breaking the law, the settlement aims to ensure future compliance and fair market practices.

Sarah Cardell, Chief Executive of the CMA, stated in an interview with BBC Radio 4’s Today programme, “Our focus is making sure this market is working competitively going forward.” She further clarified that the housebuilders “do not admit any liability or wrongdoing for the conduct subject to investigation.”

Regarding the potential impact on consumers, Ms. Cardell explained the rationale behind the £100 million commitment: “That is part of the reason why we have secured this commitment to a payment of £100m from the companies, and that will go to the people who need it the most. It will bring hundreds more affordable homes to the UK market immediately which, by the way, is a much better resolution than a long and complex investigation.”

Barratt Redrow, Bellway, Persimmon, Taylor Wimpey, and Vistry have all issued statements welcoming the CMA’s announcement. Berkeley and Bloor Homes have not yet provided comment. This development occurs amidst a broader government push for regulators to adopt a more pro-growth approach. Notably, in January, the CMA’s chair, Marcus Bokkerink, was replaced on an interim basis by Doug Gurr, former boss of Amazon UK.

Ms. Cardell concluded by reiterating the CMA’s commitment: “We are committed to tackling anti-competitive behaviour, and that is exactly what we are doing today because we have moved swiftly and effectively to resolve this case with absolute clarity. The housebuilders are in no doubt what they need to do to comply with the law.”

This case highlights the CMA’s evolving strategies in market regulation, balancing the need for enforcement with the pursuit of swift, practical resolutions that benefit consumers and the market.

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