UK builders and government need to fix housing shortage, regulator says
Adds CMA recommendations in paragraph 5, industry response in paragraphs 6-7
By Sachin Ravikumar and Aby Jose Koilparambil
LONDON, Feb 26 (Reuters) -British housebuilders need to build more, better quality homes and the government needs to streamline a complex planning system to fix a chronic shortage that drives up prices, the competition regulator said on Monday following a year-long study.
"Housebuilding in Great Britain needs significant intervention so that enough good quality homes are delivered in the places that people need them," Competition and Markets Authority (CMA) Chief Executive Sarah Cardell said.
The CMA also said it would investigate whether housebuilders share commercially sensitive information, and if that weakened competition.
Britain's biggest housebuilders include Barratt BDEV.L, Bellway BWY.L, Berkeley BKGH.L, Bloor Homes, Persimmon PSN.L, Redrow RDW.L, Taylor Wimpey TW.L and Vistry VTYV.L. The equity index of UK housebuilders .FTNMX402020 fell 2% in early trading, with shares of the biggest companies dropping the most.
The Home Builders Federation, the industry's main trade body, declined to comment on the CMA's data-sharing investigation but welcomed the focus on the "fundamental barrier to delivery" that is the planning system.
Housing has long been a political issue in Britain, with a shortage of properties driving up the cost, alienating many younger voters who, paying high rents, cannot see a way to own their own homes.
It has often split the governing Conservative Party, in power for almost 14 years, with some lawmakers in rural areas seeking to block housebuilding while those in more urban regions wanting more homes built quickly.
According to the official 2021 census, 37.3% of households in England and Wales rented their accommodation, up from 34.4% in 2011.
The government is on track to deliver 1 million new homes by an election expected later this year, but it will miss its promise to build 300,000 net new homes per year in England by the mid-2020s.
Less than 250,000 homes were built across England, Wales and Scotland last year, well short of the target, the CMA said. Britain's opposition Labour Party, well ahead in the polls, has vowed to reform the planning system.
The new investigation comes as higher interest rates and costs of living weigh on people's ability to afford a house.
"A regulatory probe is the last thing the sector needs," said Russ Mould, investment director at AJ Bell.
The CMA said that while the potential anti-competitive behaviour of housebuilders was not the main driver of the market problems, it was concerned that it could be weakening competition and influencing new house prices.
Reporting by Aby Jose Koilparambil in Bengaluru and Sachin Ravikumar in London; Additional reporting by Suban Abdulla in London; Editing by Varun H K, Dhanya Ann Thoppil, Kate Holton, Ed Osmond and Emelia Sithole-Matarise
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