The UK’s competition watchdog has said it is looking into the proposed £2.5bn acquisition by the country’s biggest housebuilder, Barratt, of its rival Redrow.
The Competition and Markets Authority (CMA) said it was issuing a preliminary “invitation to comment” to allow interested parties to submit initial views on the impact the transaction could have on competition in the UK.
“This invitation to comment is the first part of the CMA’s information-gathering process, in advance of the CMA’s formal investigation starting,” the watchdog said.
The two companies reached an agreement last month over an all-share offer from Barratt. The merged group, Barratt Redrow, would be expected to build about 23,000 homes a year and have a turnover of more than £7bn.
The CMA’s scrutiny of the deal comes as the watchdog is investigating eight major housebuilders, including Barratt and Redrow, after it found evidence that they may be sharing commercially sensitive information that could affect the price of homes.
It launched the investigation in late February into some of the sector’s biggest operators after it found evidence that suggested some were sharing non-public information, including sales prices and details of incentives for buyers.
It said this behaviour “prevented and distorted” competition and could influence decisions around pricing levels, as well as the rates at which the companies built new homes.
The watchdog released a report after a year-long investigation into the sector, in which it expressed “fundamental concerns” over the housebuilding market. It highlighted the complex planning system and limitations of speculative private development as key reasons for too few homes being built year after year, despite a housing crisis.
The watchdog also expressed concerns over the quality of new-build homes after many owners reported problems in the last decade.
The housing market has slowed and house prices have been falling after a series of interest rate rises prompted by high inflation. However, mortgage rates have eased in recent months amid fierce competition among lenders, and ahead of expected interest rate cuts from the Bank of England.
Berkeley Group, an upmarket housebuilder, said on Friday that sales between November and February were a third lower than a year earlier but added: “Enquiry levels are good, with customers looking for the prevailing political and economic uncertainty to recede and interest rates to begin to fall.”
It said house prices had been stable, while build cost inflation was negligible across most trades.
Berkeley reaffirmed that it aimed to deliver at least £1.5bn of pre-tax profits in the three years to 30 April 2026, including a £550m profit this year, down from £604m last year and returning to 2022 levels.
