Examining the UK's housing predicament: Insights from the Competition and Markets Authority's housebuilding investigation report
The Competition and Markets Authority (CMA) has published a new report on the housing crisis in England, Scotland, and Wales, offering key recommendations to address the failure of the housebuilding industry.
The report, which took 12 months to conduct, highlights the housing and placemaking crisis and places the responsibility on politicians of all colours. According to Richard Beresford, chief executive of the National Federation of Builders (NFB), the UK planning system does not enable homes, better places, or competition.
The CMA's conclusions are stark. The housebuilding market is not delivering well for consumers and has consistently failed to do so over successive decades. The report points to a broken planning process as the reason for the lack of social housing, big builders building too many new homes, SMEs being shut out, homes being in the wrong places and too expensive, issues with quality, and a lack of placemaking.
To counteract these issues, the CMA proposes several measures. Firstly, increasing the volume of houses built by improving land availability and reducing regulatory barriers. This aims to tackle the chronic under-supply of housing, which drives affordability issues.
Secondly, the report promotes competition among homebuilders to break up dominance by large firms that limit choice and innovation. This includes market structure reforms and supporting smaller developers to enter the market.
Thirdly, the CMA recommends improving transparency and consumer protection around house sales and warranties to restore buyer confidence in new homes and ensure quality.
Lastly, the report encourages innovation and efficiency in construction methods to reduce costs and speed up delivery.
These measures aim to create a more dynamic and affordable housing market that better serves the needs of residents in England, Scotland, and Wales. The report also suggests setting a single mandatory consumer code for homeowners to better pursue homebuilders over quality issues. It recommends making it easier for homeowners to switch to a more competitive management company on existing privately managed estates. Additionally, the report encourages councils to adopt amenities on all new housing estates.
Richard Beresford, whose views on the UK planning system align with the CMA's report, believes that the planning system in the UK does the opposite of what it should, which is to enable homes, better places, and competition. His comments underscore the need for reform to better support the housing market and consumers.
The report's recommendations, if implemented, could mark a significant step towards addressing the housing crisis in the UK. However, the success of these measures will depend on the political will and commitment to implement the changes necessary to create a more competitive and consumer-focused housing market.
[1] https://www.nytimes.com/2022/03/14/business/housing-market-us.html [4] https://www.wsj.com/articles/housing-market-slowdown-home-sales-prices-mortgage-rates-11659240805
