OFT to look at homebuilders
Complaints about issues such as lack of housing supply has spurred the Office of Fair Trading to launch an inquiry into the UK’s house building sector. The investigation is slated to look at issues such as planning and customer satisfaction, as well as competition and regulation within the industry.
The OFT has been keeping an eye on the sector since the release of the Barker Review of Housing Supply in 2004. That report recommended that planning rules should be relaxed to facilitate the construction of more affordable homes. Another reason that the inquiry has been undertaken is that the industry was asked to write a code of conduct, something that has not been done as yet.
Some in the industry have complained that planning has become so complicated an issue that regulations need to be relaxed before the issue of declining home supply can be addressed. While the number of households in the UK grows each year, the number of new houses built has declined in almost all of the past 15 years. The lack of supply has meant that housing prices have been rising steadily.
The inquiry is expected to be completed by the middle of next year, and could result in several different outcomes. If problems are found, the OFT could ask the Competition Commission to look at the industry. In addition, action could be taken against any companies that are found to be violating consumer or competition laws.
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