A major class action lawsuit is set to target seven of Britain’s largest housebuilders, potentially seeking up to £4.5 billion in compensation for homebuyers.
The legal challenge alleges that consumers were forced to pay inflated prices for new-build properties due to anti-competitive practices by the firms named in the action.
The case is being spearheaded by Mark McLaren, a former parliamentary and legal affairs manager at consumer group Which?, who is represented by competition law firms Geradin Partners and Hausfeld as co-counsel.
The action names Barratt Redrow (BTRW.L), Bellway (BWY.L), The Berkeley Group, Bloor Homes, Persimmon (PSN.L), Taylor Wimpey (TW.L), Vistry Group (VTY.L), and its Countryside Partnerships division.
It is being brought on behalf of over 700,000 individuals who purchased new-build homes across Great Britain between October 2015 and 24 June this year.
McLaren believes each affected homeowner could be due compensation of between £3,100 and £6,200, totalling between £2.2 billion and £4.5 billion across all claimants.
The claim now awaits approval from the Competition Appeal Tribunal before it can formally proceed against the housebuilding firms.
This development follows an ongoing investigation by the Competition and Markets Authority into whether these housebuilders shared commercially sensitive information over a two-year period concluding in February 2024.
The CMA dropped further action in return for an agreement by the firms to pay £100 million into affordable housing programmes and make binding commitments not to share information.
The watchdog had launched its probe amid concerns the firms were sharing commercially sensitive details about sales including pricing, number of property viewings, and incentives offered to buyers such as upgraded kitchens or stamp duty contributions.
McLaren said: “Buying a home is one of the biggest financial commitments most of us will make.”
He added: “If, as seems to be the case, housebuilders shared sensitive pricing and sales information with one another instead of competing properly, homeowners across Great Britain may well have been left out of pocket as a result.”
Scott Campbell, a partner at Hausfeld, said: “For most homeowners, bringing an individual claim simply isn’t realistic, as the cost and complexity put it out of reach.”
Campbell continued: “It provides a practical route for hundreds of thousands of consumers to seek compensation where they may otherwise have had no way of doing so.”
The agreement secured with the builders meant the regulator did not need to rule on whether the companies actually broke competition law, leaving that question open for the tribunal to consider.
