who stole the self build sites?
- sent this off to-day
Director General, Office of Fair Trading.(ref OFT letter of 4 Sept 07)
Copy Parliamentary Ombudsman.
Referral of named housebuilders to Competition Commission for monopoly practices, landbanking etc
In the light of new evidence you are requested to reopen the claim that the Barker Review discovered evidence of anti-competitive landbanks by corporate housebuilders which are unlawful under the Competition Act.
The new evidence is that the OFT Homebuilding Survey of 2008 discovered that self build is the largest supplier of UK houses
This in turn reveals that the Barker Review of Supply inadvertently omitted the largest supplier and is therefore flawed. The reliance of the OFT letter of 4 Sept on Barker’s findings is therefore also flawed when it states,
“The Review did not find evidence of deliberate anti-competitive intention or actions by housebuilders. In fact the interim report listed a number of valid reasons for holding land
including operational and speculative reasons.”
The case for reopening:
1 OFT Homebuilding Survey found that self build is the largest sector of supply of new houses
2 Barker overlooked the self build sector completely “inadvertently” Barker said in a letter to me.
3 I complained in a letter to OFT , 7Aug 2004 that land banks as reported in Barker were anti-competitive
4 OFT reply (above) relies on Barker
5 Self build does not acquire land banks
6 It follows contrary to Barker and OFT that landbanks are unnecessary for the largest housebuild sector (now discovered to be self build)
7Conversely ,landbanksheld by corporate housebuilders are detrimental to the largest supplier i.e. self build. In fact finding and acquiring land is the greatest deterrent to self build (see OFT Homebuilding Survey Sept 08)
8 It follows that reliance on Barker’s flawed evidence and in the then absence of the OFT Homebuilding survey evidence, OFT could not in 2004 take into account relevant evidence.
The OFT findings should therefore be set aside.
I therefore ask that the OFT reopen the complaint that the national housebuilders as listed on page 81 of the Interim Report take part in detrimental and unlawful anti competitive actions on a gross scale.
In reviewing the OFT reply I point out the irrelevance of two OFT arguments..
a) it does not matter if Barker did not find deliberate anti competitive motives for landbanking. That was not Barker’s remit. It is however the remit of OFT and one which OFT failed to address.
b) contrary to the OFT letter, Barker said (IR p 77)
“ There is some concern that options and landbanking allow housebuilders to erect barriers…”
c) compare the non operational landbanks of US and UK house builders,
Less than 3.5 years supply is the largest landbank out of 5 US builders: that of 6 u k builders ranged from 0 yrs(2) , to 33, 19, 16 and 9 years.
d) that two UK builders manage with 0 yrs strategic landbanks invalidates the OFT claim that Barker found that there were valid reasons for holding landbanks.
e) I cannot find the use of the term ‘valid’ by Barker.The question for OFT however, is legality not validity.
f)The OFT letter admission that land was held for speculative reasons supports the need to investigate .anti competitive landbanks.
g)The use of the term in OFT’s letter, ‘deliberate’, is irrelevant. Breaking the Competition law inadvertently is not a defence but may mitigate the offence..
The greatest obstacle to self build is finding and accessing building land
(see OFT homebuilding survey) The huge strategic landbanks of corporate housebuilders are arguably the greatest factor in causing the non availability of building land ( 7 firms alone control strategic land enough for 3 years of UK total housebuilding need.)and also effects the unprecedented rise in UK building land prices and are central and causative to the unequalled house price rise and are directly detrimental to stifling the largesest supply sector of UK housebuilding, i.e. self build.
It is relevant that OFT in 2008 named 142 housebuilders for rigging bids to supply Local Authority contracts.
The issue concerns the manipulation of UK’s largest manufacturing industry, concerns the integrity of Corporate life and of Regulatory institutions, vitally affects the well being of every citizen especially children, and addresses the central issue in the current economic crisis.
I therefore do not hesitate to pursue gross anti competition loudly, vigourously, and persisitently.
In a case of such gravity , the OFT will want to see complete written evidence and hear evidence formally and in person , James Armstrong.