Gove calls for CMA study into housebuilding sector and sets out new measures for Levelling Up Bill

Levelling Up secretary Michael Gove (pictured above) has announced that new measures will be set out alongside the Levelling Up and Regeneration Bill to place local communities at the heart of the planning system.

The measures aim to strengthen the government’s commitment to delivering enough suitable homes, and to giving local people a greater say on where to place new developments.

The changes — which will be considered by the government — include the introduction of new financial penalties for developers failing to build already-approved homes.

The government will also consult on whether planning permission should be required for new short-term lets, especially in tourist hotspots.

In a statement, Gove claimed the current planning system was “not working as it should”.

“If we are to deliver the new homes this country needs, new development must have the support of local communities.

“That requires people to know it will be beautiful, accompanied by the right infrastructure, approved democratically, that it will enhance the environment and create proper neighbourhoods.

“These principles have always been key to our reforms, and we are now going further by strengthening our commitment to build the right homes in the right places and put local people at the heart of decision-making,” he said.

In addition, Gove urged the Competition Markets Authority (CMA) to launch a probe into the UK housebuilding sector.

In his letter (dated 9th November) to Sarah Cardell, interim chief executive at the CMA, he asked the watchdog to consider conducting the study to assess the industry and highlight any recommended measures to be taken to ensure the sector is operating effectively in the current economic climate.

The letter is the second of its kind penned by Gove this year — he first wrote to the CMA asking for a review into the housebuilding market in May when Boris Johnson was still in office.

Gove wrote: “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.

“There have been significant changes in both the [housebuilding] market and the challenges facing the country as a whole — such as net zero, changes to the structure of the market following the financial crisis and changing demographic trends.

“Reflecting on the above, and in the context of increasing economic pressures, which are impacting on individual citizens and businesses alike, it feels timely that the CMA should be considering a market study.

“In the event such a study progressed, the government would welcome recommendations for measures we, industry and the regulators could take to make sure the housing market is operating effectively.”

The CMA said it expects to deliver an update on Gove’s request in January 2023.

These announcements follow the recent housing statistics published by Homes England last week, which revealed that 7,848 affordable houses were completed in the six months to 30th September 2022 — 2,248 less than the number of properties completed in the same period last year (10,096).

The report also showed a 7% drop in the number of affordable homes started on-site during the same period, totalling 10,986.


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