The Competition and Markets Authority report on the housing sector should be a boost to the Yimby policy machine. It expressed grave concerns about the housing market operating like a cartel, and said that much of this was enabled by the current planning system.

The CMA was tasked with looking at the housing market a year ago, because targets are consistently missed, prices are consistently rising, and there are allegations that tactics such as ‘land banking’ are used to drive up profits. The result was a strong indictment of the planning system as it currently stands.

The report found that under-staffed planning departments, combined with a veto-heavy system, made getting permission to build protracted and unpredictable. This both limited the flow of new houses and squeezed small and medium-sized developers out of the market, enabling bigger players to bank massive profits and abuse their dominance.

A further investigation was launched into eight of the biggest builders for potential anti-competitive practices. This includes cartel-like behaviour such as sharing price information and discussing incentives for homebuyers. This seemingly ‘prevented and distorted’ competition among Britain’s biggest housing developers, further entrenching high prices.

Overall, the report seems like a vindication for those pushing for a liberalisation of the planning system. The restrictions of the Town and Country Planning Act make it hard and costly to build, which in turn favours those developers with the funds to navigate the system and the cash flow to wait years for developments to come online.

The report linked this to the poor quality of new housing too. It found that the average homeowner faced 16 snagging issues on moving into a new build, ranging from minor issues to a ‘substantial minority’ of problems as grave as collapsing ceilings. These often took months to be fixed.

QOSHE - Is there a house-building cartel? - John Oxley
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Is there a house-building cartel?

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26.02.2024

The Competition and Markets Authority report on the housing sector should be a boost to the Yimby policy machine. It expressed grave concerns about the housing market operating like a cartel, and said that much of this was enabled by the current planning system.

The CMA was tasked with looking at the housing market a year ago, because targets are consistently missed, prices are consistently rising, and there are allegations that tactics such as ‘land banking’........

© The Spectator


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