Seven UK housebuilders to pay £100m to fund affordable homes after CMA investigation

Seven housebuilders have agreed to pay £100m to affordable housing schemes after the UK competition watchdog found evidence that they may be sharing commercially sensitive details that affect the price of homes.

The developers – Barratt Redrow, Bellway, Berkeley Group, Bloor Homes, Persimmon, Taylor Wimpey and Vistry – have not admitted any wrongdoing but have agreed to make the combined payment, which will be split between affordable housing programmes across the four UK nations.

The Competition and Markets Authority (CMA) opened its investigation into the housebuilders last year after it found evidence of information sharing that “prevented and distorted” competition, including on pricing levels, the number of property viewings, and incentives offered to buyers such as upgraded kitchens or stamp duty contributions.

The housebuilders have told the CMA they will refrain from sharing certain types of information with other housebuilders, including prices that homes have been sold for, except in limited circumstances.

If the watchdog accepts the commitments, they will become legally binding and mean it will not have to decide whether the housebuilders broke competition law. The regulator is consulting on the proposals until 24 July.

Sarah Cardell, the chief executive of the CMA, praised the proposed measures as “clear and comprehensive” steps.

“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,” she said.

“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.”

The £100m payment is the largest the CMA has secured through commitments from companies under investigation, which it expects will fund hundreds of new homes for low-income households, first-time buyers and vulnerable people.

The watchdog launched its investigation in 2024 after a year-long market study into barriers leading to the undersupply of new homes in the housebuilding sector.

Labour pledged in its manifesto to build 1.5m homes in England before the end of this parliament. Hitting the target would require 300,000 net new additions to the housing supply every year, a level that has never been achieved before.

Some ministers have argued they will be able to stimulate the market by reforming the planning system to make it easier for private developers to invest in new schemes.

Much of the construction industry is still recovering from an inflationary rise during the Covid pandemic that significantly increased the price of materials such as timber and concrete blocks. The price of building a home has since levelled off but the cost of raw materials and skilled labour remains high.