Affordable housing to benefit from £100m following CMA probe, but one developer says "these behemoths are coordinating like a cartel"

The Competition and Markets Authority (CMA) launched an investigation last year following concerns that 7 housing developers – Barratt Redrow, Bellway, Berkeley Group, Bloor Homes, Persimmon, Taylor Wimpey and Vistry – exchanged details about sales including pricing, number of property viewings and incentives offered to buyers such as upgraded kitchens or stamp duty contributions.

Experts were divided on the announcement, with one highly critical, saying it represents the “Martin Lewis-ification” of the UK and others welcoming it as it “brings proper competition back into the mix”.

The housebuilders, it has been revealed today, have offered a package of commitments to address the CMA’s concerns which it will now consult on until 24 July 2025. Under the proposed commitments, the 7 housebuilders will: 

• Make a combined £100 million payment – the largest secured through commitments from companies under investigation – which will be split between affordable housing programmes across all 4 nations. 
• Work with the Home Builders Federation and Homes for Scotland to develop industry-wide guidance on information sharing. 
• Agree not to share certain types of information with other housebuilders, including the prices houses have been sold for, except in limited circumstances. 

If accepted, the commitments will become legally binding and mean that it is not necessary for the CMA to decide whether the housebuilders broke competition law – allowing the investigation to conclude swiftly and benefits to be felt quickly. 

This payment will directly support the delivery of affordable housing across the UK, helping to fund hundreds of new homes for those who need them such as low-income households, first-time buyers and vulnerable people. 

The CMA said it is important that competition works well in the housebuilding market to keep prices fair, improve the quality of homes and support the delivery of essential infrastructure — and that 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. 

Sarah Cardell, Chief Executive at the CMA, 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.”

Emma Jones, Managing Director at Whenthebanksaysno.co.uk, said “this is a big move from the CMA and could shake things up in the new-build market”.

She added: "If these housebuilders stick to their promises, we might finally see a bit more honesty around pricing and incentives, which has been a grey area for a while. £100m going into affordable housing is decent, but the real benefit will be if this actually stops the backroom info-sharing and brings proper competition back into the mix. And more importantly makes affordable new builds accessible once again."

Kundan Bhaduri, Entrepreneur and Property Developer at The Kushman Group, was sceptical about the package and said it was negligible given their size: "Just to be clear, the £100 million spread across seven of Britain's largest housebuilders is roughly the profit from a single medium-sized development. Barratt Redrow, Persimmon and their peers posted combined profits exceeding £5 billion last year, so this "punishment" is barely a rounding error.

"While small developers like us were scrapping for margins on a four-unit scheme and navigating Byzantine planning rules, these giants were casually swapping data about buyer incentives and viewing numbers. My entire annual turnover wouldn't cover their coffee budget, yet amazingly they've been effectively running a WhatsApp group for pricing strategy.

“While small developers compete fairly for every deal, facing genuine market forces, these behemoths are coordinating like a cartel. The scandal in my view is that the penalty is too small to matter. Why doesn't the government start by levelling the playing field between small local builders and these giants?”

Justin Moy, Managing Director at EHF Mortgages, said there are “more pressing issues within the new build sector”: "I don't see this 'price fixing' argument as that much of a problem. Ultimately, property values are scrutinised by surveyors on behalf of mortgage lenders, so if prices are too high this process will self-regulate pricing with developers, and it's common knowledge that most builders offer incentives from a broadly standard list of options.

“There are other more pressing issues within the new build sector, such as conditional selling, the quality of build and after-sales service, which have more relevance to the end-consumer.”

But David Belle, Trader at Fink Money, said the UK needs to become less anti-business: “The Martin Lewis-ification of the UK continues unabated. We want homebuilders to build more yet we go and penalise them. What is the negative in sharing housing data between firms? Data which could largely be produced by an independent body if they so wanted? The sort of hawk-eyed lawsuit culture the UK now has is so anti-business.”

The CMA will now consult on the proposed commitments before deciding whether to accept them.