Member Article

The Office of Fair Trading (the “OFT”) has published the results of its market study into homebuilding in the UK. The report concludes that the sector is broadly competitive and there is little evidence of house builders holding onto land to restrict supply and so increase prices. However, the report also concludes that homebuyers can experience delays and faults and they need more protection when buying a new home.

As a result, representatives from across the sector have agreed to form a body to deliver a code of conduct and redress scheme for consumers, which it aims to have fully operational by March 2010. However, if the industry fails to make adequate progress or deliver an effective solution, the OFT recommends further intervention through a statutory redress mechanism. This would involve a means of redress for homebuyers with the ability to award compensation for any failings in the sales process, shortcomings in contracts, delays or faults, and would need to be funded by a levy on the industry.