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OFT springs housing surprise
The Office of Fair Trading (OFT) has announced a surprise review of the UK's housebuilding industry...
A statement from the watchdog today said it had launched the study amid potential concerns from competitors and consumers, reports Reuters.
The OFT explained that the "groundbreaking" evaluation into the £20 billion per annum industry would focus on delivery of housing and consumer satisfaction.
Details under the microscope will include whether land suitable for development is being efficiently brought through the planning approval stage and if planning permission is being effectively converted into new homes.
OFT chief executive John Fingleton said the overall aim of the year-long review is to "improve [homebuyers'] experience of buying a new-build home as well as the quality of those homes".
In-depth examination
"This is the first in-depth examination of competition and consumer issues in new housebuilding," he said, revealing that the watchdog had been assessing the housebuilding industry for the last three years.
"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," Mr Fingleton concluded.
The OFT review could lead to a market investigation by the Competition Commission or recommend that an industry code of practice be set up.
Power to take action
Possible outcomes include the introduction of a voluntary code of practice, but the OFT said it has the power to take enforcement action against firms suspected of breaching consumer or competition rules.
The OFT will focus on two key areas - whether land suitable for development is being used to best effect and the standard of properties being built.
But it stressed it would not look into the environmental impact of new homes or the overall issue of where developments should be take place across the UK. It aims to report back with its findings by next summer.
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