Gove leans on competitions watchdog to probe house builders

Housing Secretary Michael Gove has sent a letter to the Competitions and Markets Authority saying the watchdog is independent - but nonetheless asking it to consider a probe into housebuilding .

The ‘leaning’ letter was sent earlier this week at around the same time that Gove conceded to Conservative backbench MPs that the government’s housebuilding targets were now merely ‘advisory’ and giving local councils extensive grounds to refuse new homes.

The letter to the CMA says it is 14 years since the last housebuilding market study took place by the CMA’s predecessor body.

The full wording is here:

“I am writing to reiterate the Government’s support for the Competition and Markets Authority’s (CMA) consideration of a study into the housebuilding sector. I understand your Board has been considering taking this forward. 

“It is critical that we have a housebuilding sector that operates effectively to deliver the homes that people need. Housing plays a key role in achieving our Levelling Up ambitions. Buying a home is one of the most important decisions a family takes, with huge financial implications, so making sure this market is working in the interests of consumers is of the highest importance. 

“The last housebuilding market study took place 14 years ago and since then, there have been significant changes in both the market and the challenges facing the country as a whole – such as net zero, changes to the structure of the market following the financial crisis and changing demographic trends. 

“Reflecting on the above, and in the context of increasing economic pressures, which are impacting on individual citizens and businesses alike, it feels timely that the CMA should be considering a market study. In the event such a study progressed, the Government would welcome recommendations for measures we, industry and the regulators could take to make sure the housing market is operating effectively. 

“We appreciate that you are an independent organisation. Nevertheless, my view is that this study is an important priority for the public and I would welcome a discussion with you and Marcus on how best we can support you if you choose to take it forward.” 

As part of the package of concessions by Gove to the backbenchers, he also stated that the government would open a consultation on whether residential properties should require planning consent to be used as short lets via Airbnb and other platforms. 

He also indicated that local authorities would be given the powers to introduce a registration scheme for short lets.

In addition to the short lets initiative, other concessions from the government included a higher infrastructure levy on developers building on Greenfield development, taking action to prevent land banking, and ending the so-called ‘duty to co-operate’ for rural areas to help house overspill from nearby urban centres.