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OFT launches house building probe

It will examine consumer satisfaction


A probe has been launched into the £20bn a year house building industry in a bid to boost consumer confidence in buying new homes.

The Office of Fair Trading Study (OFT) has been monitoring the house building market since 2004 and is concerned that it may not be working well for consumers.

Its investigation will focus on two key areas and will allow the consumer watchdog to look at homebuyers’ concerns.

The investigation will look at consumer satisfaction with the properties available.

Planning permission

It will then examine whether land with planning permission is being converted effectively into homes and whether land which is suitable for development is being effectively brought through to the planning approval stage.

The OFT says the study will look for ways to improve people’s experience of buying a new-build home as well as the quality of those homes. It is expected to report back by summer 2008.


OFT Chief Executive John Fingleton said: ‘This is the first in depth examination of competition and consumer issues in new house-building.

‘This is a hugely important market for the economy because of its substantial economic impact and because unresponsive housing supply hinders labour mobility, constrains economic growth, and harms consumers.

‘Furthermore, for individual house buyers, even low levels of dissatisfaction can translate into very high detriment. The study will examine how regulation and competition in the market might work better for both the economy and individual house buyers.’

Which? spokesman Bob Tolliday said: ‘We welcome this investigation by the OFT. Our report last year into customer satisfaction revealed big problems with defects on new homes and showed that new homeowners had less legal protection than if they bought a new kettle.’

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