Housebuilders under investigation
The business news that matters
Hello and welcome to the latest edition of Off to Lunch…
The Competition and Markets Authority has launched an investigation into potentially anti-competitive behaviour by UK housebuilders.
The CMA said this morning that it is looking into “the suspected sharing of commercially sensitive information by housebuilders which could be influencing the build-out of sites and the prices of new homes”. The investigation involves Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey, and Vistry.
Shares in the UK housebuilders are down following the news. Persimmon and Taylor Wimpey were the biggest fallers in morning trading, down 4 per cent.
The investigation was announced at the same time as the CMA, the UK’s competition watchdog, published the findings of a year-long study into the housebuilding industry.
Sarah Cardell, chief executive of the CMA, said of the report:
“Housebuilding in Great Britain needs significant intervention so that enough good quality homes are delivered in the places that people need them.
“Our report – which follows a year-long study – is recommending a streamlining of the planning system and increased consumer protections. If implemented, we would expect to see many more homes built each year, helping make homes more affordable. We would also expect to see fewer people paying estate management charges on new estates and the quality of new homes to increase. But even then, further action may be required to deliver the number of homes Great Britain needs in the places it needs them.
“The CMA has also today opened a new investigation into the suspected sharing of commercially sensitive information by housebuilders which could be influencing the build-out of sites and the prices of new homes. While this issue is not one of the main drivers of the problems we’ve highlighted in our report, it is important we tackle anti-competitive behaviour if we find it.”
You can find a summary of the key points of the report below…
The CMA has made proposals to the government about what should happen next. These are the proposals:
You can find the CMA’s report in full here. Here is some of the reaction to the report on social media…
The companies involved are yet to respond publicly to the CMA’s announcement. A spokesman for Bellway said it was “reviewing” the report and had “engaged and cooperated fully with the CMA throughout its market study”.
The new Business Leader…
The new Business Leader website and magazine have now launched. We are building a new inspirational, aspirational and agenda-setting business publication for the UK. You can read our analysis, interviews and expert columnists on our website by clicking the image below. Our new magazine is on its way to shops and you can subscribe to your own print or digital version by clicking here
Other stories that matter…
1. High operating costs and interest rate payments on debt are the biggest challenges facing medium-sized businesses in the UK, according to the latest Economic Engine survey by BDO. More than half of the 500 executives who were surveyed were concerned about the costs associated with operating their business and borrowing money. You can read the report here
2. Sir John Armitt, the chairman of the National Infrastructure Commission, has written a letter to the chancellor and the energy secretary. Sir John warns in the letter that the government is taking “too long” to support projects that will help the UK to decarbonise its energy system. Story by the Financial Times here
3. It’s the Co-op v AO.com in Manchester. Or, more specifically, the AO Arena has objected to a licence application by Co-op Live, the new venue in Manchester which is due to open in April. You can read more in a piece by BusinessLive here
4. Warren Buffett’s latest annual letter to Berkshire Hathaway shareholders was published on Saturday. It is full of wisdom and insight, plus a tribute to his partner Charlie Munger, who died in November. “In the physical world, great buildings are linked to their architect while those who had poured the concrete or installed the windows are soon forgotten,” Buffett writes. “Berkshire has become a great company. Though I have long been in charge of the construction crew; Charlie should forever be credited with being the architect.” You can read the letter here
5. The Wall Street Journal has looked at Ikea’s efforts to revitalise struggling shopping centres in Europe and the US. Ikea has bought shopping centres such as Churchill Square in Brighton and has a plan to develop a new Ikea shop there alongside other retail and leisure facilities. Cindy Andersen, the managing director of Ingka Centres, Ikea’s property arm, is quoted as saying: “If you bring in more reasons to visit, then people will still come.” You can read the piece here
Podcast…
The latest episode of our Business Leader podcast looks at the story behind how Simon Arora and his brothers Bobby and Robin turned B&M from a small discount chain in the north of England into one of the biggest retailers in the UK. In part one, we speak to Simon Arora about how he found B&M, the strategy behind building the business, and how it nearly all ended after less than a year.
You can listen to the episode via Substack here, Spotify here or Apple here
Part two will be available from tomorrow…
And finally…
There was a fascinating interview with Christopher Nolan, the film director, in The Sunday Times. The interview covers the success of Oppenheimer, which is on course to dominate the Oscars on March 10, but also how he develops ideas. This was one of his quotes:
“In the case of Oppenheimer, the last couple of minutes of the film, those last few scenes, came to me as I was falling asleep one night. I’ve learnt over the years that if you have a great idea in the middle of the night, you really have to just get up and go and write it. So I did. I went down to my office and sat there and wrote it out longhand, and fortunately the next morning I could still read my handwriting. It still made sense. It wasn’t some half-assed dream I’d had. What I wrote that night is pretty much exactly how the film came out.”
The comments reminded me of a podcast interview we did with Roger Madelin, the man who led the transformation of King’s Cross in London, and how he develops ideas. You can listen to that episode here
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Best
Graham