The UK Housebuilding Market
An interactive summary of the CMA's investigation and its impact on consumers.
This page summarises the key findings of the Competition and Markets Authority (CMA) investigation into the UK housebuilding market.
It breaks down the market structure, the allegations of anti-competitive behaviour, and the potential impact on homebuyers and the wider society. All information is based on publicly available sources from the CMA and other reports.
A Concentrated Market
A small number of large companies dominate the UK's new-build housing sector, which can limit competition.
Market Share of New Builds (2024)
Dominant Players
The 7 housebuilders under investigation by the CMA account for over half of all new homes built.
Financial Scale
Their combined annual revenue is approximately £20 billion, highlighting their significant economic influence.
The Profitability Gap
Large housebuilders consistently report significantly higher profit margins than the rest of the construction industry, a key indicator of limited competitive pressure.
Average Operating Profit Margins
Note: Housebuilder margins typically range from 12-20%, while the wider construction sector averages 2-4%.
The Heart of the Allegation
The CMA investigation centres on the suspected sharing of competitively sensitive information between rival housebuilders.
Information Sharing
Sharing non-public data on sales prices, incentives offered to buyers, and sales rates.
Reducing Uncertainty
This allows firms to know what rivals are doing, reducing the pressure to compete on price or value.
Softening Competition
The overall effect is a less competitive market, leading to potentially higher prices and fewer choices for consumers.
How Information Sharing Harms Homebuyers
When competitors share sensitive data, it fundamentally weakens competition and disadvantages consumers.
Reduced Strategic Uncertainty
Firms know what rivals are doing, so there's less pressure to compete aggressively.
Negative Consumer Outcomes
- Potentially higher house prices.
- Fewer or less valuable incentives.
- Reduced bargaining power for buyers.
- Less choice and innovation.
This process, known as tacit collusion, allows companies to coordinate their behaviour without an explicit agreement, leading to market outcomes that resemble a cartel.
The Proposed Settlement
To resolve the investigation, the housebuilders have offered a package of commitments to the CMA.
£100m Payment
A collective payment towards affordable housing programs, not direct compensation to buyers.
Cease Sharing
A legally binding pledge to stop sharing competitively sensitive information in the future.
Internal Compliance
Implementation of enhanced internal training and compliance measures within each company.
No Admission of Wrongdoing
Crucially, the settlement allows the companies to resolve the case without a formal finding of infringement. This makes it extremely difficult for individual consumers to seek direct compensation for any past harm.
The Wider Impact of an Unaffordable Market
The consequences of a dysfunctional housing market extend beyond individual transactions, affecting society as a whole.
Financial Strain
Higher mortgage debt, reduced savings, and increased vulnerability to economic shocks for households.
Delayed Life Goals
Unaffordable housing forces many to delay major life decisions like starting a family, impacting national demographics.
Mental & Physical Health
The constant stress of high housing costs contributes to anxiety, depression, and other health issues.