OFT puts spotlight on house building industry

The Office of Fair Trading has revealed it will investigate the effectiveness of the house building process in the UK.

Following the recommendations of the Barker Review of Housing Supply 2004, the OFT has been monitoring the house building market and is concerned that it may not be working well for consumers.

The trading regulator is looking into the delivery of housing – whether land, which is suitable for development, is being effectively brought through to the planning approval stage.

It also wants to investigate whether land with planning permission is being converted effectively into homes.

The study will allow the OFT to consider the potential competition and consumer concerns within the market. It will look for ways to improve their experience of buying a new build home as well as the quality of those homes.

The OFT will be working with the industry, and the study will complement other reviews across government to minimise the burden on the sector.

The study, however, will not look at the overall question of where development should occur or the environmental impact of new homes.

John Fingleton, chief executive of the OFT, says: “This is the first in depth examination of competition and consumer issues in new house building.

“This is a hugely important market for the economy because of its substantial economic impact and because unresponsive housing supply hinders labour mobility, constrains economic growth, and harms consumers.

“Furthermore, for individual house buyers, even low levels of dissatisfaction can translate into very high detriment.

“The study will examine how regulation and competition in the market might work better for both the economy and individual house buyers.”