The offer by seven of the UK's largest housebuilders to pay £100 million and agree to legally binding restrictions on sharing information with purported rivals to resolve a competition investigation was a "get out of jail free card", one analyst said.
Coming on the same day that Sir Brian Leveson published a report with various recommendations to help clear Britain's legal backlog, including calling for more out-of-court settlements, the housebuilders made a similar offer to the Competition and Markets Authority to avoid taking an ongoing investigation further.
The CMA, which had launched an investigation in 2023 into suspected breaches of competition law, said the industry will come up with legally binding proposals to avoid collusion between building companies and it will decide whether or not to accept them.
The CMA is now consulting for just over two weeks on this proposal, with a deadline of 24 July.
If it approves the measures, it will stop its investigation and will not proceed to a decision on whether the Competition Act of 1998 has been infringed.
"We do not believe this changes much for the sector in terms of the near-term outlook, which continues to struggle with muted end-demand caused by high interest/mortgage rates and wider economic and political uncertainty," said Peel Hunt analyst Clyde Lewis.
Dan Coatsworth, investment analyst at AJ Bell, said: "It was probably the quickest decision ever made in the boardroom as the last thing housebuilders want is to have their reputation soured by a drawn-out investigation into anti-competitive practices."
He said the £100 million is "peanuts" to "make a big problem go away" and the government would be happy as £100 million of extra money would be put towards affordable housing.
"The industry has already been through various crises in recent years, such as concerns about poor build quality, mis-selling around leaseholds and fire safety.
"Housebuilders certainly don’t want to be dragged over the coals again, particularly at a point where the outlook for the property market is starting to improve amid falling interest rates."
Coatsworth added: "The housebuilders aren’t admitting they’ve done anything wrong, yet they’ve probably used up their get out of jail free card."
Lewis said the payments will vary according to the respective size of each of the seven businesses.
Barratt Redrow PLC (LSE:BTRW) said it had voluntarily offered binding commitments "alongside the other parties in response to the potential concerns investigated by the CMA, and with a view to resolving expeditiously the investigation".
It also added that the offer of voluntary commitments "does not constitute an admission of any wrongdoing by Barratt Redrow and nothing in the commitments may be construed as implying that Barratt Redrow agrees with any concerns expressed by the CMA in the investigation".
Likewise, Persimmon PLC (LSE:PSN) stressed that the competition watchdog had proposed accepting commitments not to share commercially sensitive information and would close its investigation "without making any finding that Persimmon plc and its group companies has infringed UK competition law".
It stressed how the decision to offer voluntary commitments "does not constitute an admission of any wrongdoing nor does it imply that Persimmon agrees with the concerns expressed by the CMA in the investigation".
FTSE 100-listed builders paid the most, with Barratt Redrow contributing £29 million, while Persimmon and Taylor Wimpey PLC (LSE:TW.) paid £15.24 million and £15.84 million into the pot. Berkeley Group Holdings PLC (LSE:BKG) did not issue its own separate RNS statement, nor did privately owned Bloor Homes.
Mid-cap pair Bellway PLC (LSE:BWY) and Vistry Group PLC (LSE:VTY), which made almost identical comments, said they are contributing £12.8 million and £13.5 million respectively.