Gove says housing developers akin to cartel

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Levelling-up and housing secretary, Michael Gove, is unpopular with many of the UK’s major house builders after describing them as a ‘cartel’.

In his address to the Conservative Environment Network, he incensed housing developers by confirming his view of them regarding his stance on building safety.

“I’m not particularly popular with developers at the moment because of some of the steps we’ve taken in respect of building safety and some of the other changes we want to make as well. There are 101 changes we want to make, that we’ve essentially got a cartel of volume housebuilders who operate in a particular way, and there are all sorts of unhappy consequences.”

Mr Gove criticised the building of new homes on greenfield sites, saying that developers should “think hard about regeneration” rather than leaving it to “someone else to worry about environmental externalities”.

If the developers are acting as a ‘cartel’, where they collude to keep house prices artificially high, they are acting illegally and could incur a fine of up to 10% of worldwide turnover. No evidence has been found that house builders are behaving in such a manner.

The housing industry has reacted with fury, and Mr Gove’s comments have been described as baffling.

Prior to these comments, Mr Gove had already caused tension between himself and developers over his assertion that they should foot the bill for removing flammable cladding from unsafe high rise buildings. The strong-armed approach means developers risk having planning permissions retrospectively removed if agreement fails to be made this month. If this were to happen, there is the risk that building work on existing sites could grind to a halt or even for housing development companies to collapse.

The government estimates that £4 billion is required to remedy the properties affected by the cladding crisis. Housing developers have proposed that they pay for the cladding costs on their own buildings but were not willing to agree to the new Residential Property Developer Tax proposed from April, arguing that overseas house builders and cladding manufacturers should take some responsibility.

A review commissioned from PriceWaterhouseCoopers suggested the bill is more likely to be under £1 billion.

Having reached an impasse, there are remaining disputes over culpability and data.

The Home Builders Federation said of Mr Gove’s comments that it was “extremely worrying to hear a senior member of the government speaking so disparagingly about an industry responsible for maintaining around 800,000 jobs, generating around £40 billion in economic activity annually and contributing around £7 billion per year in wider community and infrastructure benefits”.