Pennycook commits to new consumer code for housebuilders in CMA response

The government has committed to a new consumer code for housebuilders as part of its response to the competition watchdog’s study of the housing market.

In February this year, the Competition and Markets Authority (CMA) released the findings of its year-long investigation into the state of the housebuilding market in England, Scotland and Wales.

The report concluded that “the housebuilding market is not delivering well for consumers and has consistently failed to do so over successive decades” and established a probe into eight housebuilders after uncovering alleged breaches of the Competition Act.

The report made 11 recommendations to address major issues in the housing market.

In its response to the study, published this morning, the government committed to a new consumer code, as well as a New Homes Ombudsman service, which it said would empower homeowners to challenge developers over quality issues.

The government also accepted in principle the recommendation of greater protections for people living under private management arrangements.

It said it would implement measures to improve transparency around what homeowners are paying for as part of the Leasehold and Freehold Act 2024.

Other recommendations it said would require further work and consultation, including the best way to address so-called “fleecehold” estates, where homeowners on new build estates are locked into private maintenance contracts for communal areas.

>> Read more: Key takeaways from the CMA’s housebuilding report

“The CMA was right to highlight areas for improvement in the housebuilding market,” said housing and planning minister Matthew Pennycook.

“That is why we will empower homeowners to challenge developers over poor quality new homes and bad service, and we will consider the best way to address the injustice of ‘fleecehold’ private estates to bring unfair costs to an end.

Sarah Cardell, chief executive of the CMA, said: “We welcome the government’s response to our recommendations on housebuilding, which we put forward to get people better protections and open the door to delivering more good quality homes.

“Housing is an essential area for consumers and driving economic growth, so we will assist government as they take forward our solutions, alongside progressing our wider housing work.”