UK housebuilder stocks fall as regulator investigates competition breach

As a result, shares in the companies listed fell 1% to 2% in early trade as the CMA said it found evidence which indicated some housebuilders may be sharing commercially sensitive information with their competitors, which could be influencing the build-out of sites and the prices of new homes. However, the CMA said it is yet to reach a conclusion on the matter. IGTV’s Angela Barnes takes a look at the impact on share prices.

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UK housebuilding companies

Several well-known UK housebuilding companies are currently experiencing a decrease in their stock prices. This drop in value comes after news broke that eight of these companies are under investigation by the Competition and Markets Authority (CMA) for sharing sensitive information. The investigation was launched by the CMA as part of its efforts to understand why there is a shortage of new homes being built in the UK.

The CMA's investigation

The housebuilders involved in the investigation include Barrett, Bellway, Berkeley, Blore Homes, Poseidon Retro, Taylor, Wimpy, and Vistri. As a result of the investigation, the stock prices of these companies have taken a hit. For example, Vistri's shares have dropped by 0.93%, Berkeley's shares are down by just over 1%, Taylor Wimpy's shares have fallen by 2.02%, and Simon's shares are down by nearly 2%. Barrett Developments has also seen a decline of 0.13%.

The CMA's investigation suggests that these housebuilders may have been sharing commercially sensitive information with their competitors, which could potentially affect the construction of new homes and their prices. However, the CMA has not yet determined if any competition laws have been violated. Despite this investigation, the CMA does not believe that information sharing is the main reason for the shortage of new homes. Instead, the regulator is concerned about its potential impact on competition within the market.