Seven of Britain’s biggest housebuilders have offered to pay £100 million to fund affordable housing after an investigation into alleged anti-competitive practices.
The seven, Barratt Redrow, Bellway, Berkeley Group, Bloor Homes, Persimmon, Taylor Wimpey and Vistry, allegedly exchanged details about housing sales including pricing, number of property viewings and incentives offered to buyers such as upgraded kitchens or stamp duty contributions.
The claims sparked an investigation by the Competition and Markets Authority (CMA) launched in February last year.
The CMA said the companies have not admitted any wrong doing but have pledged to make the £100 million payment for affordable homes in all four nations of the UK. Only a small fraction of the total is likely to end up contributing to affordable housing in London
They have also agreed undertakings not to share certain types of sensitive information, and work with the Home Builders Federation and Homes for Scotland “to develop industry-wide guidance on information sharing. “
The CMA said it was the largest payment offer it has ever secured as part of a commitments package. It said the money could “fund hundreds of new homes – helping low-income households, first-time buyers and vulnerable people.”
If accepted, the commitments will become legally binding and the investigation will be wound up.
The authority said: “This outcome sends a clear message to other companies that the CMA will take action where it has concerns that the law is being broken.”
CMA boss Sarah Cardell said: “Housing is a critical sector for the UK economy and housing costs are a substantial part of people’s monthly spend, so it’s essential that competition works well. This keeps prices as low as possible and increases choice.
“As a result of the CMA’s investigation, housebuilders are taking clear and comprehensive steps to ensure they comply with the law and don’t share competitively sensitive information with their rivals.
“Alongside these measures, the housebuilders we investigated have agreed to pay £100 million towards affordable homes programmes, which will help communities up and down the country.”
The CMA will now consult on the proposed commitments before deciding whether to accept them. Any payments will be made within 3 months once agreed.”
One of the housebuilders Persimmon said:”Persimmon's decision to offer voluntary commitments does not constitute an admission of any wrongdoing nor does it imply that Persimmon agrees with the concerns expressed by the CMA in the investigation.
“The commitments include an ex gratia financial contribution from all seven housebuilders to the government's Affordable Homes Programme totalling £100 million. Persimmon's proportionate contribution is £15.24 million.”
Taylor Wimpey CEO Jennie Daly, said: “We welcome the CMA’s intention to conclude its investigation by accepting voluntary commitments.
“Closure of the CMA’s investigation will allow us to focus our efforts on delivering much-needed homes across the country. We will continue to work constructively with the CMA as they conclude the process.”
This article was written by Jonathan Prynn from The Evening Standard and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to legal@industrydive.com.