Michael Gove has pressed the Competition and Markets Authority to open up a probe into the housing sector, after the government was forced to back down from its target to build 300,000 homes a year following threats of a rebellion from its own MPs.
The Department for Levelling Up, Housing and Communities yesterday released a November letter the Secretary of State sent to CMA interim chief executive Sarah Cardell where he reiterated his support for a study into the housing industry.
Gove wrote: “It is critical that we have a housebuilding sector that operates effectively to deliver the homes that people need.
“Housing plays a key role in achieving our Levelling Up ambitions. Buying a home is one of the most important decisions a family takes, with huge financial implications, so making sure this market is working in the interests of consumers is of the highest importance.”
He added the last housebuilding market study took place 14 years ago, and since then the market and the country faced “significant changes”, such as net zero, the altered structure of the market following the financial crisis and changing demographic trends.
In an exchange of letters in November, the CMA’s Cardell replied that the regulator has been “developing proposals for work in this area”, adding that a decision on whether a year-long probe would go forward would be taken at its January board meeting.
These letters were published yesterday, as Gove was forced to tell a number of Conservative MPs the government’s 300,000 homes a year target was a “starting point” and would be “advisory” rather than mandatory, according to Sky News.
The move comes after a Commons vote on the Levelling Up and Regeneration Bill had to be dropped last month after 60 Tories signed an amendment calling for the target to be scrapped.
Labour shadow housing secretary Lisa Nandy yesterday accused the government of being “weak”, calling the move “unconscionable in the middle of a housing crisis”.
Industry reaction to scaling back housebuilding targets was equally fierce.
Stripe Property Group managing director James Forrester says: “This is astonishingly negligent on the part of the government.
“House building has languished below the required 300,000 annual number since the 1950s and that’s even with the focus and accountability of local authority facing targets.
“To remove those targets is to allow the UK’s requirement to dangle in the wind and we now have even less chance as a nation of providing adequate dwelling numbers. It’s a dumb move”.
Alliance real estate fund chief executive Iain Crawford adds: “Another day, another U-turn but this one is particularly serious in that in watering down the country’s likely annual residential construction output, thousands of would-be buyers and renters are going to have less choice of home.
“The result will be even higher house prices as increasing demand from net positive immigration and an ageing population continues to outweigh supply.”
