New-build Cartel?

Leaskovski

So I have seen recently that the competition and markets authority are doing a review and report on the housing market with regards to new builds...
https://www.spectator.co.uk/article/is-there-a-house-building-cartel/
https://www.constructionenquirer.com/2024/02/26/competition-probe-launched-into-8-major-house-builders/
What looks interesting here is that is mentions about the fact that house builders are (8 of them), are being reviewed to see if they have been sharing price info with regards to their new stock that they have been building.
Should this be deemed as the case, as consumers what are we likely to see of this?  Is they any come back at the builders if we are someone that has purchased a new build recently from one of those builders?

user1977

At most what we'll see is them getting their wrists slapped. It doesn't affect any individual purchases.

lika_86

user1977 said:

At most what we'll see is them getting their wrists slapped. It doesn't affect any individual purchases.

The CMA doesn't let companies off competition infringements with a slap on the wrist. 

If found to have participated in a cartel then it's possible that a private damages claim could be brought. Collective actions are starting to become a thing, which is most likely the only realistic means for individual consumers to obtain redress, but even if successful, the benefit to any one individual consumer is likely to be small and years down the line (investigations alone can take years and a damages claim even longer, with no guarantee of success).

TripleH

Also how would you determine the 'true' price of a house? There are many ways you can keep prices high which are hard to unpick and governments are guilty of indirect involvement in this.

If any punishment is handed out it would be a fine to the Companies and directors rather than a return to buyers.

stripling

TripleH said:

Also how would you determine the 'true' price of a house? There are many ways you can keep prices high which are hard to unpick and governments are guilty of indirect involvement in this.

If any punishment is handed out it would be a fine to the Companies and directors rather than a return to buyers.

Yes, absolutely. House prices are inflated by a variety of methods including 'land banking'. The big property companies sit on land with planning permission but that's only part of the picture. Prices are also inflated by policies such as help-to-buy. And the 'supply chain' from land agents upwards. 

user1977

lika_86 said:

user1977 said:

At most what we'll see is them getting their wrists slapped. It doesn't affect any individual purchases.

If found to have participated in a cartel then it's possible that a private damages claim could be brought. Collective actions are starting to become a thing, which is most likely the only realistic means for individual consumers to obtain redress, but even if successful, the benefit to any one individual consumer is likely to be small and years down the line (investigations alone can take years and a damages claim even longer, with no guarantee of success).

Have there been such successful claims?

lika_86

user1977 said:

lika_86 said:

user1977 said:

At most what we'll see is them getting their wrists slapped. It doesn't affect any individual purchases.

If found to have participated in a cartel then it's possible that a private damages claim could be brought. Collective actions are starting to become a thing, which is most likely the only realistic means for individual consumers to obtain redress, but even if successful, the benefit to any one individual consumer is likely to be small and years down the line (investigations alone can take years and a damages claim even longer, with no guarantee of success).

Have there been such successful claims?

Various collective actions are going through the process at the moment. As I say, they're relatively new. 

zagubov

I read ages ago that back in the 1960s, Singapore found that most of the housing stock was owned by a cartel of about five landowning families.
So, despite their widely acknowledged commitment to free enterprise and capitalism, they nationalised it.

RHemmings

I read of this some days ago, and am curious to see what if anything is done. I predict that the outcome won't lead to a large increase in supply of housing. I predict that there will be fines that make it look as if it's more than a slap on a wrist, but not big enough to really change the way that the companies do business. 

It's quite possible to have implicit price-fixing, where companies simply watch each other's business and prices and stay comparable. Without any direct collaboration. 

user1977

lika_86 said:

user1977 said:

lika_86 said:

user1977 said:

At most what we'll see is them getting their wrists slapped. It doesn't affect any individual purchases.

If found to have participated in a cartel then it's possible that a private damages claim could be brought. Collective actions are starting to become a thing, which is most likely the only realistic means for individual consumers to obtain redress, but even if successful, the benefit to any one individual consumer is likely to be small and years down the line (investigations alone can take years and a damages claim even longer, with no guarantee of success).

Have there been such successful claims?

Various collective actions are going through the process at the moment. As I say, they're relatively new. 

If there's no relevant precedent than I doubt it's helpful to get the OP's hopes up.

Albermarle

RHemmings said:

I read of this some days ago, and am curious to see what if anything is done. I predict that the outcome won't lead to a large increase in supply of housing. I predict that there will be fines that make it look as if it's more than a slap on a wrist, but not big enough to really change the way that the companies do business. 

It's quite possible to have implicit price-fixing, where companies simply watch each other's business and prices and stay comparable. Without any direct collaboration. 

Yes, and the key point here is that any info that is in the public domain is OK . If info is shared that is not in the public domain, then that is an issue.