THE Government is working on plans to end a “cartel” operated by major house builders that is keeping house prices high and limiting available social housing, Levelling Up Secretary Michael Gove has revealed.
In an exclusive interview with Liam Halligan on GB News, Mr Gove said some house-builders were deliberately building new homes slowly in order to maintain prices.
He said: “In essence, what we have is a situation where since the economic crash of 2008, we’ve seen more and more of the homes that have been delivered, being delivered by a small group of big volume house builders.
“And one of the problems with that is that we don’t have a market that is truly competitive. There are barriers to entry and one of them is the planning system, which means that smaller builders, artisan builders have been locked out of the system…
“They’ve been doing a number of things which haven’t exactly worked wholly in the public interest.
He added: “There’s been manipulation of the land market in order to keep prices at a particular level.
“And it’s always been the case that some volume house builders have been producing homes that are identikit and shoddy and low quality.
“What we need to do is to make sure that we have both proper planning reform that allows more market insurance, but also to take a wider look at the way in which the Land and Housing market works in order to make sure that is working in the interests of the citizen, not those people who are currently profiting handsomely.”
Speaking during a wide-ranging live interview with Liam Halligan during On The Money on GB News, Mr Gove said his department was actively working on plans to tackle the cartel.
He said: “I won’t go into the details of what the department is proposing or thinking of it would be wrong to pre-empt any announcement that might be market sensitive in any way.
“However, it is the case that we’re looking at a range of options in order to ensure that we can have a better functioning market.
“Now as I say I’m not criticising any individual, people in any industry will behave rationally in order to maximise the return for their shareholders and investors.
“It’s up to the government to make sure that the regulations that prevail, and the approach towards competition that exists is pro-consumer and pro-citizen.”
Paying tribute to Mr Gove’s “straight talking” property expert Jonathan Rolande, from the National Association of Property Buyers, commented: “I welcome the candid way in which one of the very serious issues within the property sector – the almost total control of the housebuilding sector by a small number of companies – has at last been acknowledged by the government and that plans are being prepared to put things right.
“The shortage of property and the construction of homes that are unsuitable for many potential owner-occupiers has contributed enormously to the current housing crisis.”
Asked about the huge profit margins enjoyed by house builders and multi-million pound bonuses pocketed by directors, Mr Gove said the current situation cannot continue.
“It’s important that everyone recognises that we in government are aware that the situation at the moment is insupportable,” said Mr Gove.
“Ultimately, I want to see a healthy housing market with developers and builders, both volume house builders but also smaller artisan builders, all contributing to more homes being built.
“But it’s also important that the homes that are built are beautiful and attractive and high quality. It’s critically important that we get infrastructure alongside those homes.
“It’s also important that we have developers working with communities in order to ensure that there’s democratic consent for building and also that environmental concerns are taken into account.”
He added: “At the moment, all of those aims or goals are achieved, if at all, imperfectly, and that is a situation that needs to change.
“And, as you quite rightly point out, when you’ve got an oligopoly, when you’ve got a concentration of market power, then it’s up to the Government to look to see how we can reform that market to get it to work better in the interest of citizens.”
