The four biggest housebuilders in the UK; namely Barratt, Countrywide, Persimmon, and Taylor Wimpey, have been accused of deliberately slowing down construction and suppressing competition. An article in The Spectator claims that the buyers of new build homes suffer as a direct result of this.
The article pinpoints the problem as being the ever-lengthening delays between planning permission being granted and homes being built. The four biggest developers in the country are accused of buying up all available land with planning permission and then sitting on it, to artificially inflate demand and house prices.
The developers wait until a serious housing shortage builds up in the area, and then they finally produce new homes which they make substantial profits from selling, despite the fact that they are often of substandard quality.
Michael Forsyth, chair of the Lords’ Economic Affairs Select Committee said: ‘The UK’s big developers have become far too powerful. In terms of the quality of homes built and consumer misery, these companies produce outcomes that are really quite nasty — this is not how capitalism is supposed to work.’
The government is proposing planning reforms to speed up the home building process and increase the amount of new builds, to address the chronic housing shortage in the UK. However, adding thousands of poor quality yet overpriced houses to the stock will do little to address the underlying problems in the industry.
While ministers blame the current shortage of homes on lack of land with planning permission, the article points out that four-fifths of residential planning applications are now accepted. The problem lies with the big developers who are unfairly failing to convert the land into decent quality new homes, while turning in huge annual profit margins.
The article calls for planning permission to be tied to delivery contracts, with penalties for companies who fail to deliver within a certain timeframe. Better regulations are also needed to improve the consumer rights of homebuyers, who are currently at a huge disadvantage.
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