More than 700,000 first-time buyers could land £6,200 compensation amid £4.5billion landmark lawsuit
Former Which? campaigner is seeking compensation for more than 700,000 people who bought new-build homes across Great Britain
Former Which? campaigner is seeking compensation for more than 700,000 people who bought new-build homes across Great Britain
A former consumer rights campaigner is preparing to launch legal proceedings worth up to £4.5billion against some of Britain's biggest housebuilding companies.
The action relates to alleged anti-competitive practices that may have inflated the price of new-build homes.
Mark McLaren, the former parliamentary and legal affairs manager at Which?, intends to file a class action claim against Barratt Redrow, Bellway, The Berkeley Group, Bloor Homes, Persimmon, Taylor Wimpey and Vistry Group, alongside its Countryside Partnerships arm.
The proposed claim represents more than 700,000 people who purchased newly built homes across Great Britain between October 2015 and June 24 this year.
At the centre of the case are allegations that the developers engaged in anti-competitive behaviour which resulted in buyers paying more than they should have for their properties.
The claim has now been submitted to the Competition Appeal Tribunal, which will decide whether to certify the case so it can proceed as a collective action.
The legal action follows an investigation by the Competition and Markets Authority (CMA), which examined whether the housebuilders exchanged commercially sensitive information during a two-year period ending in February 2024.
The regulator said it had concerns that the companies may have shared information capable of influencing decisions on site development and property pricing.
However, the CMA did not pursue further enforcement action after reaching an agreement with the developers.
Under that settlement, the companies agreed to contribute £100million towards affordable housing initiatives and accepted legally binding commitments designed to prevent the future exchange of commercially sensitive information.
The agreement did not include a formal finding by the watchdog that competition law had been breached.
Mr McLaren's claim alleges the anti-competitive conduct extended well beyond the period covered by the CMA's investigation.
According to the claim, eligible homeowners could receive individual compensation payments of between £3,100 and £6,200, with the total value of claims estimated at between £2.2billion and £4.5billion.
Mr McLaren said: "Buying a home is one of the biggest financial commitments most of us will make.
"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.
"This claim is about standing up for those buyers and ensuring that compensation is delivered to those who deserve it."
Scott Campbell, a partner at law firm Hausfeld, which is representing Mr McLaren alongside Geradin Partners, said: "For most homeowners, bringing an individual claim simply isn't realistic, as the cost and complexity put it out of reach.
"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 CMA's investigation found indications that the housebuilders exchanged sales-related information, including pricing data, property viewing numbers and details of incentives offered to prospective buyers, such as kitchen upgrades or contributions towards stamp duty costs.
A Berkley spokesman said: “Berkeley is aware of the claim being pursued by Geradin Partners and Hausfeld. Given the nature of the proceedings, it would be inappropriate for us to comment further at this stage.”
The rest of the housebuilders have been contacted by GB News.