CMA Release Reinvigorated Approach to Annual Plans

The release of the annual CMA plan saw the reinvigorated approach to how the plan is laid out. Hopefully, the out-ofthe-box thinking will trickle down onto ground level and help improve standards across the housing sector.

Freshening up the way the plans are set out, the CMA is setting out the 2023 to 2024 Annual Plan in 2-time horizons: ambition and medium-term priorities for the next three years, and the key areas on which the CMA intends to focus in the next 12 months.

To get there, they explained that they had: “Taken a step back and asked some important questions afresh. What is the purpose of the CMA? What is our ambition - that is to say, what are the outcomes that we aim to deliver for those we serve? And how should these shape our priorities for the next three years and our activity in the year ahead?”

They have been undertaking significant work on behalf of people with leasehold homes who fall victim to unfair terms, specifically by securing the removal of doubling ground rent clauses from leasehold contracts and obtaining refunds for thousands of householders. Looking ahead, they will be examining the accommodation sector more broadly over the next 12 months.

Competitive, fair-dealing businesses can innovate and thrive

In February, they launched a market study into housebuilding and a separate project considering consumer rights for those in rented homes. The market study follows concerns that builders are not delivering the homes people need at sufficient scale or speed. The CMA’s consumer protection work will seek to shed light on the experience of renters and explore whether more could be done to help landlords and intermediaries to understand their obligations.

At a time when public and household finances are under particular pressure, they will also continue to clamp down on cartels and other collusive behaviour that stops public bodies and private households from making the most of their available budget. For example, agreements that seek to keep prices up in public procurement or interfere in labour markets.

In the coming year, they will also bring a greater focus to emergent markets where the CMA may be able to provide advice or recommendations to help shape effective competition. This can apply to the housing sector by improving procurement methods and ensuring there are more contractors, subcontractors and SMEs applying for contracts and delivering climate objectives more efficiently and effectively.

The whole UK economy can grow productively and sustainably

The CMA’s recent State of Competition report is an example of work they do to inform public debate and policy formulation around issues such as the drivers of greater productivity and innovation.

The CMA has a continuing role to play in supporting innovation, productivity and growth and productivity across the UK economy. “The Microeconomics Unit in Darlington will be a centre of gravity for this work, developing and producing a programme of research culminating in the third edition of the State of Competition report referred to above. It will support the wider work of the CMA and policymakers, exploring areas including investment, innovation and competition.”

On sustainability, there are three ways in which the CMA can and should contribute to promote environmental sustainability and help accelerate the transition to a net zero economy.

“First, we can help ensure that markets for sustainable products or services develop in competitive ways. Second, we can help people make informed choices about the climate impact of the goods and services they use. Third, we can help ensure that competition law is not an unnecessary barrier to companies seeking to pursue environmental sustainability initiatives.”

In 2023 to 2024, as well as continuing ongoing programme of work to address possible ‘greenwashing’, they will follow up on the call for information in the green heating and insulation sectors. More broadly, they are consulting on draft guidance to help businesses take action on climate change and environmental sustainability generally, without undue fear of breaching competition rules.

Existing Housebuilding Slow Down Continues to Accelerate

by Floyd March

In further bad news for housebuilding activity, it has been recorded to have fallen at the fastest rate since the first lockdown in March. Borrowing costs have been highlighted as the reason for the slowdown.

The updated S&P Global/CIPS UK purchasing managers survey published earlier in April 2023 accredited an index score of 44.2, compared to 47.4 in February of the same year.

Housebuilding down for the fourth month in a rowis there and end in site?

This is a continuing trend for the housebuilding sector, as the index has been spiralling for four consecutive months. The latest score is the lowest since May 2020, when the closure of building sites across the UK disrupted housebuilding.

Findings from the report highlighted that: “There were fewer tender opportunities in March due to rising borrowing costs and a subsequent slowdown in new house building projects.”

Lack of housebuilding hasn’t seemed to have an effect on the prices of housing, despite supply and demand scales tipping more unevenly than ever before. Shortly after the housebuilding index was released, Halifax unveiled a house price growth of 0.8%.

House prices still on the rise, even if it is less than 1%

Updated figures have the average house price at £287,880, with annual inflation down to 1.6% from the previously reported 2.1% in February.

Brian Berry, Chief Executive of the Federation of Master Builders, voiced concerns regarding the purchasing managers index and a lack of direction from the government to increase housebuilding.

He said: “It’s troubling that house building is the weakest-performing area within the construction as the country is in the grips of a housing crisis, with smaller builders feeling the pinch on top of the decline in their output over recent decades.”