Class action targets major UK housebuilders over price-fixing allegations
Britain's largest housebuilders, including Barratt Redrow and Taylor Wimpey, are facing a multibillion-pound class action lawsuit alleging they colluded to inflate prices for new-build homes. The claim, led by former Which? legal affairs manager Mark McLaren, seeks compensation on behalf of over 700,000 consumers who purchased a new-build property between 2015 and 2026. The defendants include Barratt, Bellway, Berkeley Group, Persimmon, Taylor Wimpey, Vistry Group, and Bloor Homes.
Shares in the listed housebuilders fell on Tuesday following the announcement. Persimmon dropped 2.6%, Barratt fell 2.3%, Bellway lost 2.2%, Vistry 1.8%, Berkeley 1.3%, and Taylor Wimpey 1.7%. Bloor Homes is privately owned.
Compensation estimated at up to £6,200 per homeowner
The total compensation sought is estimated between £2.2bn and £4.5bn, equivalent to between £3,100 and £6,200 for each affected homeowner, according to law firms Geradin Partners and Hausfeld, which represent McLaren. The claim requires approval from the Competition Appeal Tribunal, a process typically taking six to twelve months.
Court documents allege the housebuilders shared sensitive information on prices, buyer incentives, and sales activity, weakening competition and driving up new-build prices, as reported by Reuters.
Background of CMA investigation and settlement
The class action follows a Competition and Markets Authority (CMA) investigation into the sector, which found evidence that companies might be sharing commercially sensitive details affecting home prices. The watchdog settled last year, securing binding commitments from the seven housebuilders not to share sensitive pricing information. The firms also agreed to pay £100m to affordable housing schemes, without admitting wrongdoing.
Geradin Partners stated in January that a claim would be filed this year. The residential construction market was estimated at £88.6bn last year, with new-builds accounting for over three-quarters of that sum. “Anti-competitive behaviour in a market of this size is liable to have a significant impact on all those buying a new-build home,” the firm said.
Reactions from claimant and analyst
Mark McLaren commented: “Buying a home is one of the most important and most expensive purchases a person will ever make. Homebuyers should be confident that the housing market is transparent and competitive so that they pay a fair price for their new home, not an inflated one.”
However, Anthony Codling, housing analyst at RBC Capital Markets, expressed skepticism: “We believe that homebuilders are price takers not price setters and compete against the much larger existing homes market. In our view the claim is difficult to prove, and we note that the CMA’s recent investigation into housebuilders did not conclude that the competition act had been infringed.”
The housebuilders have been contacted for comment. Vistry, Bellway, and Taylor Wimpey declined to comment.
