Class Action Targets Seven Major Housebuilders
Britain's largest housebuilders, including Barratt Redrow and Taylor Wimpey, are facing a multibillion-pound class action lawsuit over allegations that they colluded to inflate prices for new-build homes. The claim, brought on behalf of more than 700,000 consumers who purchased a new-build property between 2015 and 2026, seeks compensation estimated between £2.2bn and £4.5bn, equivalent to between £3,100 and £6,200 per affected homeowner.
The lawsuit is led by Mark McLaren, a former legal affairs manager at consumer group Which?, and is backed by law firms Geradin Partners and Hausfeld. The defendants include Barratt, Bellway, Berkeley Group, Persimmon, Taylor Wimpey, Vistry Group, and Bloor Homes. The claim requires approval from the Competition Appeal Tribunal, a process that typically takes six to 12 months.
Allegations of Information Sharing
Court documents allege that the housebuilders shared sensitive information on prices, buyer incentives, and sales activity, weakening competition and driving up new-build prices, according to Reuters. The class action follows a Competition and Markets Authority (CMA) investigation into the sector, which found evidence that companies may have shared commercially sensitive details affecting home prices.
In a settlement last year, the seven housebuilders secured binding commitments not to share sensitive pricing information, without admitting wrongdoing. They also agreed to pay a combined £100m to affordable housing schemes across the UK.
Impact on Share Prices and Market Context
Shares in housebuilders fell on Tuesday following news of the claim. 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 and not listed.
The UK residential construction market was estimated at £88.6bn last year, with new-builds accounting for more than three-quarters of that figure. Geradin Partners stated in January that a claim would be filed this year, noting that "anti-competitive behaviour in a market of this size is liable to have a significant impact on all those buying a new-build home."
Reactions and Defence
McLaren said: "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 scepticism: "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.
