The CMA's long-awaited market study into the housebuilding sector has concluded with a number of recommendations made for significant government interventions in the market – but has stopped short of referring the market to a full market investigation.

In brief the CMA's recommendations to the Scottish Government are:

  • To establish common adoptable standards for public amenities on new housing estates and make adoption of those amenities by local authorities mandatory;
  • To ban new embedded management arrangements (where property managers are named in title deeds and owners are unable to replace them); and
  • To issue guidance to members and directors of residents' management companies (not for profit companies incorporated to manage the shared amenities on a new build estate).

The CMA also made a number of suggestions about potential reforms to the planning system and planning processes in Scotland.

The CMA has also recommended that the UK Government take the following steps to intervene in the market in Scotland, England and Wales:

  • Introduce stronger consumer protection rules, with "robust enforcement" (although earlier papers suggested enforcement would not be by the CMA itself) for households that have private property factoring arrangements;
  • Develop and approve a single mandatory consumer code for all UK housebuilders with mandatory access to the New Homes Ombudsman Scheme;
  • Ban "drip pricing" (i.e. gradually adding charges for "additional" services which are effectively mandatory, such as essential fixtures and fittings); and
  • Require an independent body to develop and run a single consumer satisfaction survey for all housebuilders and require housebuilders to participate and publish their key quality metrics.

The CMA also made recommendations for specific government interventions in the sector in England and Wales, as well as referring a number of housebuilders for investigation for potential breaches of competition law arising from information exchanges concerning prices and sale rates.

Contributor

Jamie Dunne

Senior Associate