The UK has seen a “persistent under delivery” of new homes, according to the competition watchdog which has launched an investigation into eight major housebuilders.
Too few new homes are being delivered due to a “complex and unpredictable” planning system and the widening gap between what’s being built by private developers and what people need, the Competition and Markets Authority (CMA) said.
Its report into the housebuilding industry also identified “substantial concerns” about estate management charges – with homeowners “often facing” high and unclear charges for the management of roads, drainage and green spaces.
Less than 250,000 new homes were built last year across Britain – well below the 300,000-target for England alone, the CMA said.
Along with planning problems, a key reason for this is the system of development where homes are built without knowing in advance who will buy them or for how much, a system known as speculative private development.
The majority of houses (60%) built from 2021 to 2022 came through this system which allows builders to respond to market changes but has led to a gap between what people need and what is being built.
“The evidence shows that private developers produce houses at a rate at which they can be sold without needing to reduce their prices, rather than diversifying the types and numbers of homes they build to meet the needs of different communities (for example providing more affordable housing),” the CMA said of the system.
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Concern about the quality of housing was also identified.
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