CMA’s review of NHBC comes amid concerns over lack of protection for homebuyers.
The Competition and Markets Authority is examining payments between housebuilders and the providers of warranties for new homes as part of a review of NHBC, the largest warranty provider.
The CMA announced last month it was reviewing undertakings made by NHBC, the standard-setting body for new-build properties in the UK and the main warranty provider. These 22-year-old undertakings were designed to improve competition in the warranty market.
The review was announced amid concerns that NHBC is compromising its independence by paying millions of pounds to developers every year. However, the CMA said it was launching the review following a request from NHBC and that it would not consider the “wider issues” relating to the organisation.
Nonetheless, the CMA has sent a substantial list of questions about warranties to leading figures in the sector as part of its review. The questions, which have been seen by the Guardian, include asking warranty providers whether they have loyalty or low-claim schemes that compensate builders with a low claim rate and how these payments are calculated.