A £100 million payment of penance has been agreed between the UK competition authority and six listed housebuilders – Barratt Redrow PLC (LSE:BTRW), Bellway PLC (LSE:BWY), Berkeley Group Holdings PLC (LSE:BKG), Persimmon PLC (LSE:PSN), Taylor Wimpey PLC (LSE:TW.) and Vistry Group PLC (LSE:VTY) – along with privately owned Bloor Homes, following a probe into concerns that companies were colluding.
The Competition and Markets Authority launched the investigation in 2023 as it was worried about building firms exchanging details about sales and pricing, as well as the number of property viewings and incentives offered to buyers such as upgraded kitchens or stamp duty contributions.
This has led to the seven builders offering to make the combined £100 million payment, the proceeds of which will be split between affordable housing programmes across England, Wales, Scotland and Northern Ireland.
They have agreed to legally binding commitments which the CMA hopes will "prevent anticompetitive behaviour and promote industry-wide compliance". These commitments will include companies not sharing price information and certain other details with their peers, except in limited circumstances, with the final details on the sector-wide guidance to be worked out with industry associations.
The CMA, which said it was the largest payment it has secured as part of a commitments package, will then decide whether or not to accept the proposals.
None of the seven companies admit any liability or wrongdoing for the conduct subject to investigation, and they were keen to stress that the payment was not a fine but a payment that had been agreed.
If the commitments are formally accepted, the CMA said it will then stop its investigation and not proceed to a decision on whether the Competition Act of 1998 has been infringed.
"Any decision by the CMA to accept binding commitments will not include any statement as to whether or not the housebuilders' conduct has infringed the CA98."
Civil legal actions can arise from breaches of the Act, including claims for damages by those affected by anti-competitive behaviour.
Share price reactions for the housebuilders were varied, with FTSE 250-listed Bellway subsiding 1.4% and Vistry 0.4%, while FTSE 100-listed Taylor Wimpey dropped 0.8%, Barratt Redrow fell 0.55% and Persimmon 0.3%, while Berkeley was up 0.1%.
** Update: Clarifies fine, adds details, share prices **