The CMA announces a market study into housebuilding in England, Scotland and Wales10/03/23
On 28 February 2023, the Competition and Markets Authority (CMA) announced that it has launched a market study into housebuilding in England, Scotland and Wales. The CMA utilises market studies to examine the supply of services within a market in order to consider whether it has or may have adverse effects on consumers and what steps should be taken to resolve any issues identified.
In this insight we discuss what the housebuilding market study is and what its potential outcomes are.
What is the housebuilding market study?
In the context of the housebuilding market study, housebuilding comprises all aspects of the construction and supply of new homes. This market study has arisen following “concerns builders are not delivering the homes people need at sufficient scale or speed”.
The CMA propose to analyse the market operation and process of competition at four key stages:
- securing land for future development
- obtaining planning permission
- building properties
- selling properties.
More information can be found in the CMA’s “statement of scope”.
A market study commences with the publication of a market study notice under section 130A of the Enterprise Act 2002. Following the publication of this notice, the CMA have certain time limits within which they must publish notice of their decisions in relation to possible next steps. With regard to the housebuilding market study, the following time limits apply:
- If the CMA proposes to make a market investigation reference, or a representation has been made to the CMA that such a reference should be made, they must publish notice and begin the consultation process no later than 27 August 2023. A market investigation is a longer, more detailed examination into the sector.
- If the CMA decides not to make a market investigation reference, they must publish notice no later than 27 August 2023.
- In any event, the CMA must publish the housebuilding market study report detailing its findings and any proposed action no later than 27 February 2024.
Possible actions the CMA may take if they consider that the operation of the housebuilding market is failing to meet consumer needs include:
- making recommendations to the government for changes to legislature or public policy
- making a market investigation reference
- taking consumer based action to improve the availability of information or to encourage increased consumer awareness.
Immediate next steps
The CMA have now invited written representations on this matter and whether the CMA should make a market investigation reference. Any representations should be made no later than 20 March 2023.
Should you wish to make representations on the housebuilding market study, please ensure they are submitted prior to this deadline.
Developers and housing associations will need to carefully consider the outcome of the housebuilding market study and any subsequent effects on the operation of the housebuilding market.
As the results are yet to formally be published it is not possible to provide advice on how it will affect Registered Providers.
How Capsticks can help
Our Housing and Regeneration team offers extensive construction and development knowledge and will be following the progress and impact of the CMA housebuilding market study closely. Once the outcome is known, we will issue further guidance as to what impact this will have on our clients and the delivery of their services.
If you have any queries around what's discussed in this article, and the impact on your organisation, please speak to Spencer Vella Sultana or Susie Rogers to find out more about how Capsticks can help.