Housebuilders Cleared By OFT
A year-long inquiry by the government's competition watchdog into the UK housing industry's pricing practices has found “little evidence” of anticompetitive practice by housebuilders and “no evidence” of monopolies, even on a local level.
The report found that housebuilders did not ‘landbank’ or restrict supply in order to increase prices.
John Fingleton, OFT Chief Executive, said: 'We have found the homebuilding market to be generally competitive, with no evidence that individual homebuilders have the ability to restrict supply in order to inflate prices or to hoard land for anti-competitive reasons...However, we have concluded that homebuyers need more protection when buying a new home and we have worked hard with the industry to help it develop a new approach to self-regulation that will improve consumer protection.
The OFT has set four milestones on the path to establishing a new code to protect consumers, which it says must be up and running by March 2010 (see box). The OFT will also recommend a statutory redress system, paid for by a levy on the industry.
The code will cover issues such as dispute resolution and moving-in dates, and is endorsed in principle by lenders and builders.
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